Realtors are encountering a growing number of buyers backing out of home purchase agreements as consumers grow more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract during that month, marking the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in buyers having second thoughts to heightened selectivity in a market that has become more costly.
“Buyers are walking away from deals due to minor issues because the monthly costs tied to purchasing a home today are too significant to overlook not getting everything on their must-have list,” Zubiate commented.
Rafael Corrales, a Redfin agent in Miami, described witnessing “nightmare scenarios,” including last-minute cancellations over trivial details. Approximately 2,500 home purchases were canceled in Miami last month, accounting for about 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern is affordability.
The median home sale price hit a record $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the high property prices and elevated mortgage rates, potential home buyers are also contending with increased costs related to insurance, property taxes, homeowners association fees, and other homeownership expenses, all of which have been worsened by inflation.
The nationwide lack of affordability has contributed to the most significant drop in home sales in eight months, according to Redfin. On a monthly basis, home sales decreased by 0.5% in June, representing the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were down 21.5% compared to pre-pandemic levels.