Realtors are facing an unprecedented increase in cancellations from buyers as individuals become more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that were under contract during that month. This marks the highest percentage of cancellations for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed this growing trend to buyers who are becoming increasingly discerning, particularly in light of rising market 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 noted that he has witnessed “nightmare scenarios” where last-minute cancellations occur over small details. Last month, around 2,500 home purchases were canceled in Miami alone, representing approximately 17.6% of homes that went under contract in June. Corrales identified affordability as the primary concern for most buyers.
The median home sale price in June reached a record $442,525, while the average rate on a 30-year mortgage stood at 6.92%. In addition to these high home prices and elevated mortgage rates, potential buyers are also contending with increased costs associated with homeownership, including insurance, property taxes, and HOA fees, all of which have been impacted by inflation.
The nationwide lack of affordability has led to the most significant drop in home sales in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the largest decline since October 2023. In comparison to the previous year, home sales were down by 1.1% and remained 21.5% lower than pre-pandemic levels.