Realtors are experiencing an unprecedented number of buyers backing out of home purchases as the real estate market becomes increasingly challenging.
A recent report from Redfin indicated that nearly 56,000 home-purchase agreements were canceled in June, constituting 15% of all homes that went under contract that month. This figure marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent serving the San Francisco Bay Area, attributes this surge in buyer cancellations to a more selective clientele grappling with a costly housing market. She noted that many buyers are withdrawing from deals over relatively minor issues due to the high monthly costs of homeownership, which compel them to ensure they meet all their essential criteria.
Rafael Corrales, another Redfin agent based in Miami, reported witnessing troubling last-minute cancellations over small details, with around 2,500 home purchases canceled in the city last month—amounting to about 17.6% of homes that went under contract in June. He emphasized that rising affordability issues are the primary concern for buyers.
In June, the median home sale price reached a record high of $442,525, while the average interest rate for a 30-year mortgage was 6.92%. Prospective buyers face escalating costs associated with homeownership, including insurance, property taxes, homeowners association fees, and other expenses that have been driven up by inflation.
This lack of affordability has led to the most significant decline in home sales in eight months, according to Redfin. Monthly home sales dropped by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.