Realtors are experiencing a surge in buyers backing out of home purchases, reflecting a growing trend of selectiveness amid a challenging real estate market.
A recent report by Redfin indicates that nearly 56,000 home-purchase agreements collapsed in June, representing 15% of all homes that were under contract that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes this increase in cancellations to buyers who are becoming more selective due to rising market 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,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, noted that he has witnessed extreme cases of last-minute cancellations over trivial matters. Approximately 2,500 home deals were canceled in Miami last month, equating to around 17.6% of homes that went under contract in June. Corrales emphasized that the main concern remains affordability.
In June, the median home sale price reached a record high of $442,525, alongside a 30-year mortgage average rate of 6.92%. Prospective buyers are further burdened by costs related to insurance, property taxes, HOA fees, and other ownership expenses, which have increased due to inflation.
The national affordability crisis has led to the most significant decline in home sales in eight months, as highlighted by Redfin. On a month-to-month basis, home sales fell 0.5% in June—the largest drop since October 2023. Comparatively, year-over-year home sales dropped by 1.1% and were down 21.5% from pre-pandemic levels.