Realtors are witnessing an unprecedented rise in buyers backing out of home purchases as consumers become increasingly discerning in a challenging real estate environment.
According to a Redfin report released recently, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of the total homes that went under contract during that month. This marks the highest cancellation rate recorded for a June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the uptick in cancellations to buyers who are becoming more selective amid rising costs in the housing market. “They are withdrawing due to minor issues because the monthly expenses related to buying a home today are too significant to overlook without checking off every item on their must-have list,” Zubiate remarked.
Rafael Corrales, another Redfin agent based in Miami, reported experiencing “nightmare scenarios” where buyers canceled last minute due to insignificant details. In Miami alone, about 2,500 home purchase agreements were rescinded last month, accounting for approximately 17.6% of contracts. He noted that the primary concern for buyers remains affordability.
The median home sale price hit a record high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to the soaring home prices and persistently high mortgage rates, potential buyers are also facing escalating expenses from insurance, property taxes, HOA fees, and various other costs tied to homeownership—factors that inflation has only intensified.
The nationwide struggle for affordability in the housing market has led to the steepest decline in home sales in eight months, as reported by Redfin. Home sales fell by 0.5% in June compared to the previous month, marking the largest drop since October 2023. On an annual basis, home sales decreased by 1.1% and were 21.5% lower than levels seen before the pandemic.