Realtors are experiencing an increasing number of buyers withdrawing from home purchases as individuals become more discerning in a challenging real estate market.
In June, nearly 56,000 home-purchase agreements were canceled, equating to 15% of all homes that went under contract that month, as reported by Redfin. This marks the highest percentage of cancellations for any June in the platform’s history.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in withdrawal rates to buyers’ heightened selectivity amid rising costs. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” Zubiate noted.
Rafael Corrales, a Redfin agent based in Miami, described some of the “nightmare scenarios” he has witnessed, including last-minute cancellations over minor details. In Miami alone, approximately 2,500 home purchases were canceled last month, which represents about 17.6% of homes that went under contract in June. Corrales emphasized that affordability remains the chief concern for many buyers.
In June, the median home sale price reached an all-time high of $442,525, with the average rate for a 30-year mortgage sitting at 6.92%. Coupled with the high costs of homes and elevated mortgage rates, potential buyers are also facing challenges from increasing insurance, property taxes, HOA fees, and other expenses tied to homeownership, all of which have been worsened by inflation.
This prevailing lack of affordability in the market across the country has led to the most significant decline in home sales in eight months, according to Redfin. On a month-to-month basis, home sales dropped by 0.5% in June, the steepest decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.