Buyers Hit Pause: Real Estate Market Sees Record Cancellations

Realtors are encountering an increased number of hesitant buyers as the challenging real estate market prompts greater selectivity among home shoppers.

According to a Redfin report released Tuesday, 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 June by the real estate platform.

Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributes the rising number of cancellations to buyers becoming more discerning in an expensive market. “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 noted.

Rafael Corrales, a Redfin agent in Miami, has also observed “nightmare scenarios,” including last-minute cancellations over trivial matters. Approximately 2,500 home purchases were called off in Miami last month, equating to about 17.6% of homes under contract in June. Corrales emphasized that affordability remains the primary concern.

In June, the median home sale price reached an unprecedented $442,525, with the average 30-year mortgage rate at 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are struggling with the costs of insurance, property taxes, homeowners association fees, and other expenses associated with owning a home, all of which have been compounded by inflation.

The national affordability crisis has led to a significant decline in home sales, the largest drop seen in eight months, according to Redfin. Monthly home sales fell by 0.5% in June, marking the steepest decline since October 2023. On a year-over-year basis, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.

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