Realtors are encountering a growing trend of buyers backing out of home purchase agreements as the real estate market remains challenging. A report by Redfin revealed that nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes that went under contract during that month. This marks the highest percentage of cancellations recorded in June by the real estate service.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributes this surge in last-minute cancellations to buyers becoming more selective in a costly market. She noted that buyers are canceling deals over minor issues since the financial implications of purchasing a home today are substantial.
In Miami, Rafael Corrales, another Redfin agent, reported witnessing dramatic scenarios unfold, including last-minute cancellations due to trivial concerns. Last month, about 2,500 home purchases were called off in Miami, representing roughly 17.6% of homes that were under contract in June. Corrales indicated that the primary hurdle for buyers remains affordability.
In June, the median home sale price reached a record high of $442,525, with the average 30-year mortgage rate at 6.92%. Prospective homeowners also face rising costs related to insurance, property taxes, homeowners association fees, and other expenses linked to homeownership, all of which have been intensified by inflation.
The nationwide lack of affordability has contributed to the most significant decline in home sales in the past eight months, as reported by Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the largest drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.