Homebuying Crisis: Why Are Buyers Backing Out?

Realtors are experiencing an unprecedented wave of buyers backing out of home purchases as the real estate market continues to present challenges. According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month, marking the highest percentage recorded for June by the real estate site.

Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers becoming more selective amid high costs in the current market. She noted that many are withdrawing from deals over minor concerns, as the financial implications of buying a home today feel overwhelming without meeting all their desired criteria.

Similarly, Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios” where buyers canceled at the last minute over trivial matters. In Miami alone, about 2,500 home purchases were canceled last month, accounting for approximately 17.6% of homes that went under contract in June. Corrales emphasized that the primary issue remains affordability.

June saw the median home sale price reach a record $442,525, with the average 30-year mortgage rate at 6.92%. Prospective buyers are further plagued by high insurance costs, property taxes, HOA fees, and other expenses linked to homeownership, all intensified by inflation.

The overall lack of affordability has led to the most significant decline in home sales in eight months. Monthly home sales experienced a drop of 0.5% in June, marking the steepest fall since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.

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