Realtors are experiencing an unprecedented number of buyers backing out of home purchase agreements, with new data indicating heightened selectiveness in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that entered contracts that month. This marks the highest percentage of cancellations recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increased cancellations to buyers who are more discerning due to the elevated costs of home ownership. She noted that many are withdrawing from deals over minor concerns, as the monthly expenses associated with buying a home are substantial and make buyers hesitant to settle for less than their ideal criteria.
Rafael Corrales, a Redfin agent in Miami, reflected on the serious challenges buyers are facing, recalling “nightmare scenarios” where last-minute cancellations occur because of small details. In Miami alone, approximately 2,500 home purchases were canceled last month, amounting to about 17.6% of homes that went under contract in June. Corrales emphasized that the primary obstacle remains affordability.
The median home sale price reached a historic high of $442,525 in June, coinciding with an average mortgage rate of 6.92% for 30-year loans. With home prices and mortgage rates remaining high, potential buyers are further burdened by additional expenses such as insurance, property taxes, HOA fees, and other ownership costs, all of which have been exacerbated by inflation.
The ongoing affordability crisis has led to the most significant decline in home sales nationwide in eight months. According to Redfin, home sales dropped by 0.5% in June compared to the previous month, marking the largest decrease since October 2023. Year-over-year, home sales decreased by 1.1%, and they are currently 21.5% lower than pre-pandemic figures.