Realtors are facing a rise in buyers backing out of home purchases, with many becoming increasingly selective in a challenging real estate market. A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation rate for June recorded by the real estate site.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the trend to buyers being deterred by the high costs of purchasing a home. Many are walking away over minor issues, as the financial burden of home ownership has become significant.
Rafael Corrales, a Redfin agent in Miami, reported experiencing troubling situations where buyers canceled homes at the last minute due to small details. In June alone, approximately 2,500 home purchases were canceled in Miami, accounting for around 17.6% of the homes that went under contract. Corrales highlighted that affordability remains the primary challenge.
The median home sale price reached an all-time high of $442,525 in June, alongside an average 30-year mortgage rate of 6.92%. In addition to rising home prices and mortgage rates, potential buyers are also grappling with increased costs from insurance, property taxes, homeowner association fees, and other expenses tied to homeownership, all amplified by inflation.
This issue of declining affordability has contributed to a significant drop in home sales, with Redfin reporting the largest decline in eight months. Home sales fell by 0.5% in June compared to the previous month, the biggest decrease since October 2023. Year-over-year, home sales experienced a 1.1% dip and were 21.5% lower than pre-pandemic levels.