Cases of cold feet have spread throughout the housing market, according to Redfin, which reported that homebuyers are backing out of purchase deals at a record rate.
Per figures from the real estate brokerage, almost 56,000 purchase agreements fell through in June. That equates to about 14.9% of homes that went under contract, marking the highest share of canceled home sales on record for any June since Redfin began keeping track.
Small concerns are becoming amplified because of the high cost of homeownership, according to San Francisco Bay Area Redfin agent Julie Zubiate.
“Buyers are getting more and more selective,” Zubiate said. “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.”
“We’re seeing nightmare scenarios where deals are getting canceled at the last minute for the most minute reasons,” echoed Rafael Corrales, a Redfin agent in Miami. “Buyers often back out during the inspection period because they find something they don’t like, but affordability is really the underlying issue.”
Florida has been a hot spot for purchase cancellations. Among major metros, the three cities with the largest shares of pending sales that fell out of contract were in the Sunshine State: Orlando, where 20.8% of home-purchase agreements were canceled in June, followed by Jacksonville and Tampa, both at 20.5%. In Miami, where Corrales works, about 2,500 home purchases fell through in June, equating to 17.6% of homes that went under contract during the month.
Unaffordability is also making many sellers reconsider their initial asking prices. According to Redfin’s data, 19.8%, or almost one in five, homes for sale had a price cut. That’s the highest of any June on record and not far from the record high of 21.7%, set during October 2022.
