Realtors are experiencing an unprecedented number of buyers backing out of home purchases as individuals become increasingly selective in a challenging real estate market.
A Redfin report revealed that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest cancellation rate recorded for any June by the real estate website.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to a more discerning buyer demographic facing heightened market prices. “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, a Redfin agent in Miami, noted that he has witnessed troubling scenarios where buyers cancel at the last moment over minor details. In Miami, approximately 2,500 home purchases were canceled last month, representing about 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern remains affordability.
The median home sale price in June reached an all-time high of $442,525, while the average interest rate for a 30-year mortgage stood at 6.92%. Alongside the elevated home prices and persistent mortgage rates, potential buyers are also contending with additional expenses such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
The nationwide affordability crisis has led to a notable decline in home sales, which saw their steepest drop in eight months, according to Redfin. Monthly home sales fell by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, sales dipped by 1.1% and remained 21.5% below pre-pandemic levels.