Realtors are facing an unprecedented number of buyers backing out of home purchases, as many individuals become increasingly selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are more discerning amidst rising costs. “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 explained.
Rafael Corrales, another Redfin agent in Miami, described “nightmare scenarios” with last-minute cancellations over minor details. In Miami alone, approximately 2,500 home purchases were canceled last month, amounting to 17.6% of homes that went under contract. Corrales indicated that the primary concern remains affordability.
In June, the median home sale price hit a record high of $442,525, with the average rate on a 30-year mortgage at 6.92%. Additionally, prospective buyers are facing the burden of escalating insurance, property taxes, homeowners association fees, and other costs associated with homeownership, all of which have been intensified by inflation.
This widespread lack of affordability nationwide has contributed to the most significant decline in home sales in eight months, according to Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the steepest drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than levels seen before the pandemic.