Realtors are experiencing an unprecedented number of buyers withdrawing from home purchases as buyers grow increasingly selective in a challenging real estate environment. According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of homes that went under contract that month. This marks the highest cancellation rate for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in buyer hesitancy to the high costs associated with purchasing a home. She noted that buyers are backing out over minor issues because the financial implications of buying a home in the current market are steep, making it essential for them to find properties that meet all their requirements.
Rafael Corrales, a Redfin agent based in Miami, echoed these sentiments, citing “nightmare scenarios” of last-minute cancellations due to small details. In Miami alone, around 2,500 home purchases were canceled last month, accounting for approximately 17.6% of homes that were under contract in June. Corrales emphasized that affordability remains the primary concern for buyers.
The median home sale price hit an all-time high of $442,525 in June, while the average interest rate for a 30-year mortgage stands at 6.92%. Alongside these elevated home prices and persistent mortgage rates, buyers are also facing increased expenses from insurance, property taxes, homeowner association fees, and other associated costs that have been heightened by inflation.
The nationwide affordability crisis has led to a significant decline in home sales, with Redfin reporting the largest drop in eight months. Home sales fell by 0.5% month-over-month in June, the most substantial decline since October 2023. Year-over-year, home sales decreased by 1.1%, placing them 21.5% below pre-pandemic levels.