Cancellations Surge: Are Home Buyers Losing Their Nerve?

Realtors are encountering an increasing number of indecisive buyers as the real estate market becomes more challenging. In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that entered contracts that month. This figure marks the highest cancellation rate recorded for June by the real estate platform Redfin.

Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes the increase in cancellations to buyers becoming more selective due to rising costs. She noted that many are retracting their offers for minor issues because the financial burden of homeownership today is so significant that they want to ensure their must-have items are met.

Rafael Corrales, a Redfin agent working in Miami, reported experiencing “nightmare scenarios,” including last-minute deal cancellations over minor details. In June, approximately 2,500 home purchases in Miami were canceled, amounting to about 17.6% of homes that entered contracts during that month. He emphasized that affordability remains the primary concern for buyers.

The median home sale price hit a record $442,525 in June, while the average interest rate on a 30-year mortgage stood at 6.92%. Compounding the high home prices and elevated mortgage rates, potential buyers are also facing additional expenses such as insurance, property taxes, HOA fees, and other costs related to homeownership, which have been further intensified by inflation.

The nationwide lack of affordability has led to a significant drop in home sales, with Redfin reporting the largest decline in eight months. Home sales fell by 0.5% in June compared to the previous month—the largest decrease since October 2023. Year-over-year, sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.

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