Realtors are facing an unprecedented number of buyers backing out of real estate deals, as individuals become increasingly selective due to challenges in the housing market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation rate recorded for June by the real estate website.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this increase in cancellations to buyers who are navigating an expensive market. She noted that buyers are withdrawing from deals over minor issues because the monthly expenses linked to homeownership have become too significant to overlook.
Rafael Corrales, a Redfin agent in Miami, described seeing troubling scenarios unfold, including last-minute cancellations triggered by small details. In Miami, approximately 2,500 home purchases were canceled in June, equating to around 17.6% of homes that went under contract. Corrales emphasized that the main concern for buyers is affordability.
The median sale price for homes reached a new high of $442,525 in June, while the average 30-year mortgage rate was reported at 6.92%. In addition to the steep prices of homes and elevated mortgage rates, potential homebuyers are also facing increased burdens from insurance, property taxes, homeowners’ association fees, and other ownership costs that have been aggravated by inflation.
The widespread lack of affordability has led to a notable decline in home sales nationwide, as indicated by Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the largest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were approximately 21.5% lower than pre-pandemic levels.