Realtors are facing a significant increase in buyers backing out of home purchase agreements, as prospective homeowners become more selective in a challenging real estate landscape. A Redfin report released on Tuesday revealed that almost 56,000 home-purchase agreements were canceled in June, equating to 15% of all homes under contract during that month. This marks the highest cancellation rate for any June recorded by the real estate platform.
According to Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, many buyers are retreating from deals over minor issues, largely due to the high costs associated with homeownership in today’s market. “The monthly costs related to buying a home are so elevated that buyers feel compelled to ensure they get everything on their wish list,” she explained.
In Miami, Redfin agent Rafael Corrales has reported “nightmare scenarios” involving last-minute cancellations for trivial reasons. The local market experienced around 2,500 canceled home purchases last month, representing approximately 17.6% of homes that went under contract in June. Corrales identified affordability as the central concern for many buyers.
The median home sale price surged to a record $442,525 in June, with the average rate for a 30-year mortgage reaching 6.92%. Alongside high home prices and elevated mortgage rates, prospective buyers are also facing increased costs from insurance, property taxes, homeowners association fees, and other expenses related to homeownership, all compounded by inflation.
This nationwide lack of affordability has contributed to the most significant decline in home sales in eight months. According to Redfin, home sales fell by 0.5% in June compared to the previous month, marking the steepest decline since October 2022. Year-over-year sales decreased by 1.1%, and the current sales figures are 21.5% lower than pre-pandemic levels.