Realtors are experiencing a significant increase in buyers backing out of home purchase agreements, as consumers become more selective in a challenging real estate market. According to a recent report from Redfin, nearly 56,000 home-purchase agreements were abandoned in June, representing 15% of all homes under contract that month—the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributed the surge in cancellations to buyers who are now prioritizing their must-have features amid rising costs. “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 explained.
In Miami, another Redfin agent, Rafael Corrales, noted instances of “nightmare scenarios” with last-minute cancellations over trivial details. In June, approximately 2,500 home purchases were canceled in Miami, accounting for about 17.6% of homes under contract that month. Corrales emphasized that the main issue is affordability.
The median home sale price reached an all-time high of $442,525 in June, with the average interest rate for a 30-year mortgage at 6.92%. Buyers are facing not only high home prices and mortgage rates but also additional costs such as insurance, property taxes, and homeowner association fees, which have been affected by inflation.
This ongoing affordability challenge has contributed to a significant decline in home sales nationwide, marking the largest decrease in eight months. Home sales fell by 0.5% in June from the previous month, the steepest drop since October 2023. Year-over-year, home sales decreased by 1.1% and remained 21.5% lower than pre-pandemic levels.