Realtors are encountering an unprecedented number of buyers backing out of home purchases, as potential homeowners become increasingly selective in a challenging real estate market.
A recent Redfin report revealed that nearly 56,000 home-purchase agreements were canceled in June, amounting to 15% of all homes that entered contracts that month. This marks the highest percentage ever recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed this trend to buyers who are more discerning, struggling with the high costs associated with purchasing a home. “They’re backing out due to minor issues because the monthly costs tied to buying a home today are too steep to overlook their must-have criteria,” Zubiate noted.
In Miami, Redfin agent Rafael Corrales recounted instances of “nightmare scenarios,” with buyers withdrawing from agreements over trivial concerns. Last month, approximately 2,500 home purchases were canceled in Miami, equating to about 17.6% of homes that went under contract in June. Corrales indicated that the primary challenge remains affordability.
The median home sale price surged to a record $442,525 in June, alongside a 30-year mortgage average rate of 6.92%. Buyers are also facing rising costs tied to property insurance, taxes, homeowner association fees, and other expenses that have been worsened by inflation.
Redfin reported that the ongoing affordability crisis in the nationwide market has led to the most significant decline in home sales in eight months. Monthly home sales dropped by 0.5% in June, representing the steepest decrease since October 2023. Year-over-year home sales fell by 1.1%, reflecting a 21.5% drop compared to pre-pandemic figures.