In June, nearly 56,000 home-purchase agreements were canceled, accounting for 15% of all homes under contract that month, marking the highest rate recorded for June by Redfin.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributed this increase in cancellations to more discerning buyers who are facing a challenging real estate market. Many are withdrawing from agreements due to minor issues, as the costs associated with purchasing a home are perceived to be prohibitively high.
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios” with last-minute cancellations over trivial details. In Miami alone, approximately 2,500 home purchases were called off in June, representing 17.6% of homes that went under contract in that timeframe. Corrales emphasized that the primary concern for buyers is affordability.
The median home sale price reached an all-time high of $442,525 in June, while the average interest rate for a 30-year mortgage stood at 6.92%. In addition to the elevated home prices and mortgage rates, buyers are also facing soaring costs related to insurance, property taxes, HOA fees, and other expenses linked to homeownership, all of which have been intensified by inflation.
This lack of affordability has led to a significant decline in home sales nationwide, with Redfin reporting the largest drop in eight months. Home sales fell by 0.5% in June compared to the previous month, marking the steepest decline since October 2023. On a year-over-year basis, sales decreased by 1.1% and were 21.5% lower than the levels seen before the pandemic.