As the real estate market continues to face challenges, more buyers are backing out of home purchases. A report from Redfin indicates that nearly 56,000 home-purchase agreements were canceled in June alone, representing 15% of all homes that went under contract that month, marking the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes this increase in buyer cancellations to a more discerning buyer pool that is confronted with high costs. She noted that potential buyers are withdrawing over minor issues because the current monthly expenses related to homeownership are substantial.
Rafael Corrales, a Redfin agent in Miami, described troubling scenarios involving last-minute deal cancellations triggered by small details. In Miami, about 2,500 home deals were called off in June, equating to roughly 17.6% of that market’s contracts. Corrales identified affordability as a significant concern for buyers.
The median home sale price hit a record high of $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. In addition to pricey home listings and elevated mortgage rates, prospective buyers are also facing increased financial burdens like insurance, property taxes, and homeowners association fees, all of which have been driven up by inflation.
The overall lack of affordability in the housing market has led to the most significant decline in home sales in eight months. According to Redfin, home sales decreased by 0.5% in June compared to the previous month—the largest such decline since October 2023—and were down 1.1% year-over-year, sitting 21.5% below pre-pandemic levels.