Realtors are facing an unprecedented number of buyers withdrawing from home purchases as consumers become increasingly selective in a challenging real estate market.
A report from Redfin indicated that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month, marking the highest rate for any June recorded by the platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who hesitate over minor details, largely due to the high monthly costs of homeownership. “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 explained.
Rafael Corrales, another Redfin agent in Miami, reported witnessing significant disruptions, including last-minute cancellations due to small concerns. In Miami alone, approximately 2,500 home transactions were canceled in June, representing about 17.6% of homes that entered contracts. He emphasized that affordability remains the most pressing issue for potential buyers.
In June, the median home sale price reached an all-time high of $442,525. Simultaneously, the average rate for a 30-year mortgage climbed to 6.92%. These elevated costs, compounded by insurance, property taxes, and homeowners association fees, have made the expenses of homeownership increasingly burdensome, especially in light of ongoing inflation.
This nationwide issue of affordability has led to a significant drop in home sales, representing the largest decrease in eight months, according to Redfin. Monthly home sales fell by 0.5% in June, marking the most substantial decline since October 2023. Year-over-year, sales decreased by 1.1%, and were 21.5% lower than the levels seen before the pandemic.