Realtors are experiencing a surge in buyers withdrawing from home purchases, with many becoming more selective in a challenging real estate environment.
According to a report from Redfin, nearly 56,000 home purchase agreements fell through in June, accounting for 15% of all homes that were under contract that month—marking the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes the increase in cancellations to buyers becoming more discerning in response to soaring costs in the housing market. “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, a Redfin agent in Miami, reported witnessing “nightmare scenarios,” including last-minute cancellations over trivial matters. Approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of homes that went under contract in June. Corrales pointed out that the fundamental issue remains affordability.
The median home sale price reached a record $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. These high home prices, coupled with elevated mortgage rates, have left potential buyers grappling with additional costs such as insurance, property taxes, and homeowners association fees—factors that have been worsened by inflation.
Nationwide, the lack of affordability has contributed to the most significant decline in home sales seen in eight months, according to Redfin. Monthly home sales dropped by 0.5% in June, marking the steepest decrease since October 2023. Year-over-year, home sales fell by 1.1% and were down 21.5% compared to pre-pandemic levels.