Realtors are facing an unprecedented number of buyers backing out of home purchases, as consumers are becoming more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that were under contract that month. This marks the highest percentage recorded for the month of June by the real estate website.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the trend to buyers who are now wary and reconsidering their purchases. “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,” she stated.
Rafael Corrales, another Redfin agent based in Miami, reported experiencing “nightmare scenarios,” including last-minute cancellations for minor reasons. In Miami alone, approximately 2,500 home purchases were canceled in June, making up about 17.6% of homes going under contract that month. Corrales noted that the primary concern for buyers is affordability.
The median sale price for homes hit a record $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to the high home prices and mortgage rates, potential buyers are also facing burdensome costs such as insurance, property taxes, and homeowners association fees. These expenses have been further exacerbated by inflation.
The nationwide affordability crisis has contributed to the most significant decline in home sales in eight months, according to Redfin. Monthly home sales fell by 0.5% in June, the largest decrease since October 2023. Compared to the previous year, home sales declined by 1.1% and were 21.5% lower than levels seen before the pandemic.