Realtors are experiencing an unprecedented number of buyers backing out of deals as consumers become more selective amidst challenging conditions in the 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 contracted that month. This marks the highest cancellation rate recorded for June by the real estate website.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are facing a more expensive market. She noted, “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.”
Rafael Corrales, another Redfin agent based in Miami, reported witnessing “nightmare scenarios,” including last-minute cancellations over trivial matters. In June, around 2,500 home purchases in Miami were canceled, equating to approximately 17.6% of homes that were under contract. Corrales emphasized that affordability remains the primary concern.
In June, the median home sale price hit a record $442,525, while the average interest rate for a 30-year mortgage rose to 6.92%. Prospective buyers are also facing rising insurance rates, property taxes, homeowner association fees, and other costs related to homeownership that have been aggravated by inflation.
The national decline in affordability has led to the most significant drop in home sales in eight months, as reported by Redfin. Sales decreased by 0.5% in June compared to the previous month, which is the largest decline since October 2023. Additionally, sales fell by 1.1% year-over-year and were 21.5% lower than pre-pandemic levels.