Realtors are facing an unprecedented number of buyers backing out of home purchases as consumers become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation rate for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers who have become more discerning due to high market costs. She stated that buyers are walking away from deals over minor issues because the monthly expenses of purchasing a home are now exceedingly high.
In Miami, Redfin agent Rafael Corrales reported “nightmare scenarios,” with last-minute cancellations stemming from trivial concerns. He noted that about 2,500 home purchases were called off in Miami last month, accounting for approximately 17.6% of homes that went under contract in June. Corrales emphasized that the core issue remains affordability.
The median home sale price reached a record $442,525 in June, while the average interest rate for a 30-year mortgage was 6.92%. In addition to steep home prices and high mortgage rates, prospective buyers are grappling with the burdens of insurance, property taxes, HOA fees, and other homeownership costs that have risen due to inflation.
This widespread lack of affordability has led to a significant slowdown in home sales nationally, marking the largest decline in eight months, as reported by Redfin. Monthly home sales decreased by 0.5% in June, the largest drop since October 2023, while year-over-year sales fell 1.1%, sitting 21.5% below pre-pandemic levels.