Realtors are facing an increasing number of buyers backing out of home purchase agreements, as evident in the latest reports from Redfin. In June, nearly 56,000 agreements, accounting for 15% of all homes that went under contract, were canceled—the highest percentage recorded for any June.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes the rise in cancellations to more selective buyers who are navigating a costly real estate market. She noted that potential homeowners are withdrawing from deals over minor issues because the overall costs of purchasing a home have become difficult to justify without fulfilling their entire list of must-haves.
Rafael Corrales, a Redfin agent in Miami, reported witnessing significant last-minute dropouts due to small details. Approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of agreements. He emphasized that the primary concern for buyers is affordability.
In June, the median home sale price hit a record high of $442,525, with the average 30-year mortgage rate at 6.92%. Alongside the steep prices, potential buyers are also facing rising insurance costs, property taxes, HOA fees, and other expenses linked to homeownership, which have all been heightened by inflation.
The widespread issue of affordability has led to a notable decline in home sales nationwide, marking the largest drop in eight months, as reported by Redfin. Month-to-month, home sales decreased by 0.5% in June—the most significant decline since October 2023. Year-over-year, sales also fell by 1.1% and were 21.5% lower than pre-pandemic levels.