Realtors are encountering an increased number of buyers backing out of home purchases, as individuals become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home purchase agreements were canceled in June, which accounts for 15% of all homes that entered into contract that month. This marks the highest percentage of cancellations recorded in June by the real estate platform.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are more discerning and facing high expenses in the current market. She noted that buyers are withdrawing due to minor concerns, as the ongoing costs of home buying can be too burdensome without addressing all their must-have criteria.
Rafael Corrales, a Redfin agent in Miami, reported witnessing problematic situations, including last-minute cancellations for minor issues. In June alone, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of contracts. Corrales pointed out that the primary concern for buyers is affordability.
The median home sale price hit a record high of $442,525 in June, while the average rate for a 30-year mortgage rose to 6.92%. Prospective buyers are also facing additional financial burdens from insurance, property taxes, homeowners association fees, and other costs that inflation has magnified.
The national lack of affordability in the housing market has led to the most significant decline in home sales seen in eight months, as per Redfin. Monthly home sales fell by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, home sales decreased by 1.1%, standing at 21.5% below levels seen before the pandemic.