Realtors are witnessing an unprecedented number of homebuyers backing out of purchase agreements as individuals become increasingly selective in a challenging real estate market.
Recent data from Redfin indicates that nearly 56,000 agreements to buy homes fell through in June, representing 15% of all homes that went under contract during the month. This marks the highest percentage 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 who are more discerning and facing a pricey market. “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,” Zubiate noted.
In Miami, Redfin agent Rafael Corrales described “nightmare scenarios” resulting from last-minute cancellations over trivial details, with approximately 2,500 home purchases being canceled in the city last month, translating to about 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern remains affordability.
In June, the median home sale price soared to a record $442,525, while the average rate for a 30-year mortgage reached 6.92%. Potential homebuyers are also faced with additional costs such as insurance, property taxes, and homeowners association fees, all of which have been further strained by inflation.
This widespread lack of affordability has led to the steepest decline in home sales across the nation in eight months, according to Redfin. Home sales saw a monthly drop of 0.5% in June, the largest decline since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.