Realtors are facing an unprecedented number of buyers backing out of home purchases, as consumers grow more selective amidst a challenging real estate market.
A recent report from Redfin indicates that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes going under contract that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers being more discerning, primarily due to the high costs associated with purchasing a home.
“Buyers are opting out for minor reasons because the monthly costs related to homeownership today are too significant to overlook,” Zubiate noted.
Rafael Corrales, a Redfin agent in Miami, reported encountering numerous last-minute cancellations triggered by small issues. In June alone, around 2,500 home purchases were canceled in Miami, accounting for about 17.6% of homes under contract. He emphasized that the central challenge is affordability.
The median home sale price reached an all-time high of $442,525 in June, alongside an average 30-year mortgage rate of 6.92%. Buyers are further burdened by additional expenses including insurance, property taxes, homeowner association dues, and other homeownership costs, all heightened by inflation.
The national affordability crisis has led to the steepest decline in home sales observed in eight months, as reported by Redfin. Month-over-month, home sales dropped by 0.5% in June, the largest decrease since October 2023. Comparatively, year-over-year home sales fell by 1.1% and were 21.5% below pre-pandemic figures.