Realtors are facing an increasing number of buyers backing out of home purchases, with June witnessing a significant rise in cancellations amid a challenging real estate environment. A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that entered contracts that month. This represents the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in canceled deals to a more discerning group of buyers navigating a costly market. She noted that many buyers are withdrawing from agreements over minor concerns because the monthly expenses tied to buying a home are too significant to overlook.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios,” including last-minute cancellations driven by trivial issues. Approximately 2,500 home purchases were canceled in Miami last month, which amounts to about 17.6% of homes that went under contract in June. He emphasized that the primary challenge remains affordability.
The median home sale price reached a record high of $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. In addition to steep home prices and elevated mortgage rates, potential buyers are struggling with added expenses like insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
This widespread unaffordability has led to a notable decline in home sales nationwide, marking the largest drop in eight months. Redfin reported that home sales decreased by 0.5% in June compared to the previous month, which is the most considerable decline since October 2023. Year-over-year, home sales declined by 1.1% and were down 21.5% from pre-pandemic levels.