Realtors are facing an unprecedented number of buyers withdrawing from home purchase agreements as selectivity increases in a challenging real estate landscape.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month—the highest rate recorded for any June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, noted that the rise in cancellations is largely due to more discerning buyers who are navigating 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 remarked.
Rafael Corrales, a Redfin agent in Miami, recounted instances of “nightmare scenarios,” with last-minute cancellations over small details. Last month, approximately 2,500 home purchases were canceled in Miami, amounting to about 17.6% of homes that were under contract in June. Nonetheless, Corrales emphasized that affordability remains the primary concern.
In June, the median home sale price reached a record high of $442,525, while the average rate for a 30-year mortgage stood at 6.92%. In addition to high home prices and mortgage rates, prospective buyers are also facing increased costs related to insurance, property taxes, HOA fees, and other expenses associated with homeownership, all of which have been intensified by inflation.
This lack of affordability nationwide has led to the most significant decline in home sales in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June—the largest fall since October 2023. On a year-over-year basis, sales dropped by 1.1%, falling 21.5% below pre-pandemic levels.