Realtors are facing an increasing number of buyers backing out of home purchases, as buyer preferences become more specific in a challenging real estate environment.
A recent report from Redfin revealed that nearly 56,000 purchase agreements were canceled in June, which accounts for 15% of all homes that went under contract during that month. This marks the highest rate for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the uptick in cancellations to buyers being more discerning while navigating an expensive market. She stated, “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list.”
Rafael Corrales, another Redfin agent based in Miami, shared that he has encountered troubling situations, including last-minute pullouts over insignificant details. Approximately 2,500 home purchases were abandoned in Miami last month, representing about 17.6% of homes that went under contract in June. However, Corrales emphasized that the primary concern remains affordability.
The median home sale price hit a record-high of $442,525 in June, with the average rate on a 30-year mortgage standing at 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are also contending with rising costs related to insurance, property taxes, homeowners association fees, and other expenses linked to homeownership, all intensified by inflation.
The nationwide affordability crisis has led to the steepest decline in home sales in eight months, according to Redfin. On a monthly basis, home sales decreased by 0.5% in June — the most significant drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than levels seen before the pandemic.