Realtors are facing an increase in buyers backing out of home purchase agreements, with a recent report from Redfin indicating that nearly 56,000 agreements fell through in June, representing 15% of all homes that went under contract during that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the rise in cancellations to increasingly selective buyers who are confronted with an expensive market. She explained that buyers are retreating over minor issues, as the financial burdens associated with buying a home today feel too significant to overlook.
Meanwhile, Rafael Corrales, another Redfin agent from Miami, noted troubling trends, including last-minute cancellations for trivial reasons. He reported that approximately 2,500 home purchases in Miami were canceled last month, amounting to about 17.6% of agreements made in June. Corrales emphasized that affordability remains the predominant concern for buyers.
In June, the median home sale price soared to a record $442,525, while the average interest rate for a 30-year mortgage reached 6.92%. Buyers are also grappling with additional costs linked to homeownership, such as insurance, property taxes, and HOA fees, all of which have been exacerbated by inflation.
The nationwide affordability crisis has led to the largest decline in home sales in eight months, according to Redfin. Compared to the previous month, home sales fell by 0.5% in June—the largest monthly decrease since October 2023. Year over year, home sales experienced a dip of 1.1% and were 21.5% below pre-pandemic figures.