Realtors are facing an unprecedented surge in buyers backing out of home purchase agreements, with a recent report from Redfin highlighting that nearly 56,000 agreements were canceled in June, representing 15% of all contracts for that month. This figure marks the highest rate of cancellations recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to a more discerning buyer demographic that is struggling with the high costs of the current real estate market. She noted that buyers are withdrawing due to minor issues since the monthly expenses linked to homeownership are increasingly difficult to justify without meeting all their requirements.
Miami-based Redfin agent Rafael Corrales echoed these sentiments, describing extreme instances where buyers canceled deals over trivial details. In Miami alone, approximately 2,500 home purchases were canceled in June, equating to about 17.6% of homes that were under contract. Corrales highlighted that the foremost concern for buyers remains affordability.
In June, the median home sale price reached a historic high of $442,525, with the average 30-year mortgage rate at 6.92%. In addition to escalating home prices and high mortgage rates, prospective buyers are also grappling with rising insurance, property tax, and homeowners association fees, all exacerbated by inflation.
This widespread lack of affordability has led to a significant nationwide decline in home sales, marking the steepest drop in eight months, according to Redfin. Monthly home sales dipped by 0.5% in June, the largest decrease since October 2023. Year over year, sales fell by 1.1%, standing at 21.5% below levels seen before the pandemic.