Realtors are facing an increasing number of buyers withdrawing from home purchases, as people become more selective in a challenging real estate market.
Nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month, according to a Redfin report released on Tuesday. This is the highest percentage of cancellations recorded for any June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers who are more discerning and grappling with higher costs in the current market.
“They’re backing out over minor issues because the monthly expenses tied to buying a home today are incredibly high, making it hard to justify not getting everything on their must-have list,” said Zubiate.
Rafael Corrales, a Redfin agent in Miami, noted he has observed “nightmare scenarios,” including last-minute cancellations over small details. Approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of homes that went under contract in June. Corrales emphasized that affordability remains the primary issue.
The median home sale price hit a record $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. Besides the high cost of homes and still-elevated mortgage rates, prospective buyers are also burdened by insurance, property taxes, HOA fees, and other costs tied to homeownership, all exacerbated by inflation.
The nationwide lack of affordability has led to the largest decline in home sales in eight months, according to Redfin. Home sales saw a monthly drop of 0.5% in June—the biggest decrease since October 2023. On a year-over-year basis, home sales fell 1.1% and were 21.5% below pre-pandemic levels.