Realtors are reporting an increasing number of buyers backing out of home purchases, as consumers become more selective in a challenging real estate market.
In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that went under contract that month, according to a Redfin report released Tuesday. This marks the highest percentage of cancellations recorded for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in buyer hesitance to the current high costs associated with home buying. She noted that buyers are withdrawing from deals over minor issues because the financial stakes are much higher in today’s market.
In Miami, Redfin agent Rafael Corrales observed several instances of abrupt cancellations due to small details, reporting around 2,500 canceled purchases last month, which is approximately 17.6% of homes that were put under contract in June. He identified affordability as the most significant challenge facing buyers.
In June, the median home sale price hit a record high of $442,525, with the average interest rate on a 30-year mortgage rising to 6.92%. Additionally, prospective buyers are facing rising costs from insurance, property taxes, homeowners association fees, and other expenses related to homeownership, all intensified by inflation.
This nationwide affordability crisis has led to a notable decline in home sales, the largest seen in eight months, according to Redfin. Home sales dropped by 0.5% in June compared to the previous month, marking the most significant decrease since October 2023. Year-over-year, home sales fell by 1.1% and were down 21.5% compared to pre-pandemic levels.