Realtors are facing an unprecedented number of buyers backing out of transactions as the real estate market becomes increasingly challenging. 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, marking the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being more selective and overwhelmed by market costs. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” with last-minute cancellations for trivial reasons. Approximately 2,500 home purchases were canceled in Miami in June, which constitutes about 17.6% of homes that were under contract. Corrales noted that the primary concern for buyers remains affordability.
The median home sale price reached a record $442,525 in June, accompanied by an average mortgage rate of 6.92% for a 30-year loan. Additionally, buyers are contending with rising insurance, property taxes, HOA fees, and other related costs, which have been further inflated due to economic conditions.
The significant lack of affordability in the housing market has contributed to home sales experiencing their steepest decline in eight months, as reported by Redfin. Home sales dipped by 0.5% in June from the previous month, representing the most substantial decrease since October 2023. On a year-over-year basis, home sales fell by 1.1%, sitting 21.5% below pre-pandemic levels.