Realtors are experiencing an unprecedented number of buyers withdrawing from home purchase agreements, as potential homeowners are becoming increasingly selective in a challenging real estate market.
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. This marks the highest cancellation rate recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in buyer cancellations to a more discerning clientele struggling with the costly market. She noted, “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.”
Rafael Corrales, a Redfin agent in Miami, reported witnessing troubling situations, including last-minute cancellations over insignificant details. Approximately 2,500 home purchases in Miami were called off in June, accounting for about 17.6% of homes that entered into contracts. Corrales emphasized that affordability concerns are the primary challenge for buyers.
The median home sale price reached a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. In addition to high home prices and rising mortgage rates, prospective buyers are also facing burdens from insurance, property taxes, homeowners association fees, and other expenses linked to homeownership, all heightened by ongoing inflation.
The national housing market’s affordability crisis has led to a significant decline in home sales, marking the largest drop in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, the steepest decline since October 2023. Year-over-year, home sales saw a 1.1% drop and were 21.5% lower than pre-pandemic figures.