Realtors are facing an unprecedented number of buyers backing out of home purchase agreements, as a more selective clientele navigates a tough real estate market.
A recent Redfin report highlights that nearly 56,000 home purchase agreements fell through in June, representing 15% of all homes that went under contract during that month—marking the highest percentage recorded in June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to buyers who are more discerning and facing a high-cost market. She noted, “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, echoed this sentiment, describing “nightmare scenarios” of last-minute cancellations over trivial matters. Approximately 2,500 home purchases were canceled in Miami last month, equating to about 17.6% of homes that went under contract during June. Corrales indicated that the primary concern remains affordability.
In June, the median home sale price reached a record $442,525, with the average rate for a 30-year mortgage at 6.92%. In addition to the high asking prices, prospective buyers are also contending with rising insurance, property taxes, HOA fees, and other homeownership costs that have been impacted by inflation.
The declining affordability across the national market has led to the most significant drop in home sales in eight months, as reported by Redfin. The home sales fell by 0.5% from the previous month in June, the largest decline since October 2023. Compared to last year, home sales decreased by 1.1%, and they remain 21.5% below pre-pandemic levels.