Realtors are facing an unprecedented number of buyers backing out of transactions as individuals become increasingly selective in today’s challenging real estate market.
According to a report from Redfin released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes set to be sold that month. This marks the highest cancellation rate for any June recorded by the platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are becoming more discerning in a market characterized by high expenses.
“They are withdrawing due to minor issues because the monthly costs of buying a home now are too significant to overlook any shortcomings on their wish list,” Zubiate explained.
Rafael Corrales, another Redfin agent in Miami, reported experiencing “nightmare scenarios” with clients canceling deals over trivial matters. Last month, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of contracts. However, Corrales pointed out that the primary concern is affordability.
In June, the median home sale price hit a record high of $442,525, with the average interest rate on a 30-year mortgage at 6.92%. Potential buyers are also facing challenges from escalating insurance costs, property taxes, HOA fees, and other expenses linked to homeownership, all intensified by inflation.
Nationwide, the growing unaffordability of homes has contributed 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 steepest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.