Realtors are facing an increasing number of buyers withdrawing from home purchase agreements, as consumers become more discerning in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all 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 surge in cancellations to buyers who are more selective, particularly as they navigate a high-cost market. She noted that many are backing out of deals over minor issues because the financial stakes are significant.
Rafael Corrales, a Redfin agent in Miami, described some of the last-minute cancellations as “nightmare scenarios” triggered by small details. In Miami alone, around 2,500 home purchases were canceled in June, representing approximately 17.6% of homes under contract. He emphasized that the key challenge remains affordability.
As of June, the median home sale price reached a record high of $442,525, with the average rate for a 30-year mortgage at 6.92%. In addition to elevated home prices and sustained mortgage rates, potential buyers are also contending with insurance costs, property taxes, HOA fees, and other expenses related to homeownership that have been intensified by inflation.
The ongoing affordability crisis has led to the largest decline in home sales nationwide in eight months, according to Redfin. Month-to-month sales in June fell by 0.5%, marking the most substantial drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% below levels seen before the pandemic.