Realtors are facing an increasing number of buyers backing out of home purchases, with a surge in cancellations amid a challenging real estate market. A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes placed under contract during that month, marking the highest cancellation rate for June ever recorded.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to a more discerning buyer demographic struggling with elevated housing costs. She noted that buyers are opting out of deals due to minor issues, as the financial implications of purchasing a home have become increasingly significant.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios,” including last-minute cancellations over trivial details. Approximately 2,500 home purchases were canceled in the city last month, amounting to about 17.6% of homes under contract in June. Corrales highlighted that the primary concern for buyers remains affordability.
In June, the median home sale price hit an unprecedented $442,525, while the average 30-year mortgage rate soared to 6.92%. Alongside the high home prices and continued elevated mortgage rates, buyers are also facing additional burdens from insurance, property taxes, HOA fees, and other homeownership costs, all heightened by inflation.
The overall lack of affordability has contributed to the sharpest decline in home sales in eight months, according to Redfin. Month-over-month, home sales shrank by 0.5% in June—the largest decrease since October 2023. Year-over-year, sales dropped by 1.1% and were down 21.5% compared to pre-pandemic levels.