According to a new report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that were under contract that month. This figure marks the highest percentage recorded for June since Redfin began tracking these figures.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increased cancellations to a more discerning pool of buyers navigating a challenging real estate environment. She noted that buyers are retreating from deals over minor concerns because the high monthly costs of homeownership make it essential for them to find a property that meets all their requirements.
Rafael Corrales, a Redfin agent in Miami, reported witnessing significant last-minute cancellations often driven by minor issues. In Miami alone, around 2,500 home purchases were canceled in June, amounting to approximately 17.6% of homes under contract. He highlighted that the primary challenge buyers face is affordability.
In June, the median home sale price hit a record $442,525, while the average rate for a 30-year mortgage surged to 6.92%. Prospective homeowners are also contending with increasing costs related to insurance, property taxes, HOA fees, and other expenses associated with homeownership, all of which have been compounded by inflation.
The nationwide affordability crisis has led to the most significant decrease in home sales in eight months, as reported by Redfin. Month-over-month, home sales saw a decline of 0.5% in June, marking the largest drop since October 2022. Year-over-year, sales fell by 1.1% and were down 21.5% compared to levels before the pandemic.