Realtors are facing an increasing number of buyers who are backing out of home purchases, as individuals become more selective in a challenging real estate environment.
In June alone, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that entered contract during that month, according to a report from Redfin. This marks the highest cancellation rate for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers being more discerning in light of escalating costs in the housing market.
“Buyers are withdrawing due to minor issues because the monthly costs tied to homeownership are now too significant to overlook without getting everything on their wish list,” Zubiate noted.
Rafael Corrales, another Redfin agent based in Miami, remarked on the “nightmare scenarios” he has witnessed, including last-minute cancellations over trivial details. In Miami, about 2,500 home purchases were called off last month, accounting for roughly 17.6% of homes that went under contract in June, with affordability being the main concern.
The median home sale price reached an all-time high of $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. Coupled with the expensive housing market, prospective buyers are also facing additional financial burdens such as insurance, property taxes, HOA fees, and other costs that have been worsened by inflation.
The overall lack of affordability across the nation has led to a significant drop in home sales, described as the largest decline in eight months by Redfin. Monthly home sales dipped by 0.5% in June, marking the steepest decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.