Realtors are facing an increasing number of buyers who are backing out of home purchases, as consumers become more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements, or 15% of all homes under contract in June, were canceled. This marks the highest percentage of cancellations for the month of June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributed this trend of buyer hesitation to rising home costs. She noted that potential buyers are withdrawing from deals due to minor issues, as the overall costs of homeownership have become increasingly difficult to justify.
In Miami, fellow Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” involving last-minute cancellations over trivial details. In June, about 2,500 home sales were canceled in Miami, accounting for approximately 17.6% of homes that went under contract. Corrales highlighted affordability as the primary challenge.
The median home sale price reached an all-time high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to high home prices and elevated mortgage rates, prospective buyers are also faced with additional expenses such as insurance, property taxes, and homeowners association fees, which have increased due to inflation.
The widespread affordability issues have contributed to a significant drop in home sales across the nation, with Redfin reporting a 0.5% decrease in sales from the previous month, marking the largest decline since October 2023. Year-over-year, home sales fell by 1.1%, and were 21.5% below pre-pandemic levels.