Real estate agents are encountering an increasing number of buyers who are backing out of home purchases, as individuals grow more discerning in a challenging market.
In June alone, nearly 56,000 home-purchase agreements fell through, representing 15% of all homes that entered contracts that month, according to a report from Redfin. This marks the highest cancellation rate recorded for any June by the real estate website.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to more selective buyers who are feeling the financial strain of a higher market. “They are withdrawing over minor issues because the monthly costs associated with buying a home today are too significant for them to compromise on their must-have list,” she explained.
In Miami, Redfin agent Rafael Corrales noted that he has witnessed several “nightmare scenarios,” including last-minute cancellations over trivial details. Approximately 2,500 home purchases were canceled in Miami in June, amounting to about 17.6% of homes that went under contract. He highlighted affordability as the primary concern for buyers.
The median home sale price hit a record high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. Alongside high home prices and elevated mortgage rates, potential buyers are also facing additional financial burdens from insurance, property taxes, HOA fees, and other associated costs that inflation has intensified.
Nationwide, the affordability crisis in the housing market has led to a significant drop in home sales, marking the largest decline in eight months, according to Redfin. Monthly sales fell by 0.5% in June, representing the largest decrease since October 2023, while year-over-year sales dropped by 1.1% and were down 21.5% compared to pre-pandemic figures.