In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that went under contract during the month, according to a report from Redfin. This marks the highest percentage of cancellations recorded for any June by the real estate website.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to a more discerning buyer base navigating a challenging and expensive market. She noted that buyers are opting out of deals over minor issues because the high monthly costs associated with homeownership make it difficult to settle for anything less than their requirements.
Similarly, Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios” involving last-minute deal cancellations over trivial matters. Last month, approximately 2,500 home purchases in Miami were called off, which accounted for around 17.6% of homes that were under contract in June. Corrales emphasized that the primary concern for buyers is affordability.
The median home sale price reached a record high of $442,525 in June, alongside an average mortgage rate of 6.92% for a 30-year loan. In addition to elevated home prices and mortgage rates, potential buyers face significant financial burdens from insurance, property taxes, HOA fees, and other costs of homeownership, all of which have been intensified by inflation.
The ongoing affordability crisis in the housing market has resulted in the largest monthly decline in home sales in eight months, as reported by Redfin. Home sales decreased by 0.5% in June compared to the previous month, marking the largest drop since October 2023. Year-over-year, home sales fell by 1.1%, and are currently 21.5% lower than pre-pandemic levels.