Real estate agents are encountering an unprecedented number of buyers backing out of home purchases as potential homeowners become more selective in a challenging real estate market.
According to a Redfin report published on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, pointed out that a more discerning buyer is influenced by rising costs in today’s housing market. She explained, “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.”
In Miami, Redfin agent Rafael Corrales noted “nightmare scenarios” unfolding, including last-minute cancellations for trivial matters. Approximately 2,500 home purchases were called off in Miami last month, which accounts for roughly 17.6% of homes under contract in June. Corrales emphasized that the main concern remains affordability.
The median home sale price hit a record high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to steep home prices and elevated mortgage rates, prospective buyers are also facing burdens from insurance, property taxes, HOA fees, and other ownership costs that have been heightened by inflation.
This widespread lack of affordability across the nation has led to a notable decline in home sales, marking the largest drop in eight months, as reported by Redfin. Home sales fell by 0.5% in June compared to the previous month, representing the steepest decline since October 2023. Year-over-year sales also fell by 1.1%, standing 21.5% below pre-pandemic figures.