Realtors are facing an increasing number of buyers withdrawing from home purchases, as potential homeowners become more selective in a challenging real estate market.
According to a recent 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 percentage recorded for any 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 backing out over minor issues, as the costs associated with homeownership have become too high for many to ignore. “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 stated.
In Miami, fellow Redfin agent Rafael Corrales noted witnessing “nightmare scenarios” with last-minute cancellations driven by small details. Last month, approximately 2,500 home purchases were called off in Miami, equating to around 17.6% of homes that went under contract in June. Corrales emphasized that the main hurdle is affordability.
The median home sale price reached a historic high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to high home prices and elevated mortgage rates, prospective buyers are also dealing with additional costs such as insurance, property taxes, and homeowners association fees, all further strained by inflation.
The widespread lack of affordability has contributed to the largest decline in home sales observed in eight months, per Redfin’s analysis. Home sales fell by 0.5% in June, marking the most significant drop since October 2023. Year-over-year, home sales decreased by 1.1% and remain 21.5% below pre-pandemic levels.