Realtors are experiencing an increase in buyers backing out of home purchases as individuals become more discerning in a challenging real estate environment.
According to a report from Redfin published on 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 cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in buyer withdrawals to a more selective clientele facing a costly market. She explained that buyers are canceling deals over minor issues because the overall expenses tied to purchasing a home have become too significant to disregard their must-have list.
Rafael Corrales, another Redfin agent based in Miami, noted experiencing “nightmare scenarios,” including last-minute cancellations over trivial details. In Miami, approximately 2,500 home purchases were canceled last month, accounting for about 17.6% of homes under contract in June. He pointed out that affordability remains the biggest concern for buyers.
In June, the median home sale price hit a record high of $442,525, while the average rate for a 30-year mortgage reached 6.92%. Alongside elevated home prices and mortgage rates, potential buyers are also facing additional burdens from insurance, property taxes, HOA fees, and other costs related to homeownership, all of which have been intensified by inflation.
This lack of affordability in the national market has led to a significant decline in home sales, with the largest drop observed in eight months. According to Redfin, home sales decreased by 0.5% in June, marking the most substantial decline since October 2023. Year-over-year, home sales fell by 1.1% and remain 21.5% lower than pre-pandemic levels.