Realtors are facing a significant increase in buyers backing out of home purchases as consumers become more discerning in today’s 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 that month, marking the highest percentage recorded for any June by the real estate company.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers being more selective and struggling with increased 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.
In Miami, fellow Redfin agent Rafael Corrales reported alarming situations where buyers canceled at the last minute over trivial matters. Approximately 2,500 purchases were called off in Miami last month, which accounts for 17.6% of homes that were under contract in June. Corrales emphasized that the primary concern remains affordability.
As of June, the median home sale price reached a record $442,525, with the average interest rate on a 30-year mortgage at 6.92%. In addition to the high prices of homes and ongoing elevated mortgage rates, potential buyers are also grappling with additional expenses such as insurance, property taxes, HOA fees, and other costs tied to homeownership that have been impacted by inflation.
This prevailing lack of affordability on a national scale has led to the sharpest decline in home sales in eight months, as reported by Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the most significant drop since October 2023. Year-over-year, home sales decreased by 1.1% and are now 21.5% below pre-pandemic figures.