Realtors are experiencing an unprecedented number of buyers backing out of home purchases, as a more discerning clientele navigates a challenging real estate market.
Nearly 56,000 purchase agreements were abandoned in June, representing 15% of all homes that were under contract that month, as reported by Redfin. This marks the highest percentage recorded for any June in the site’s history.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributed the increase in canceled deals to buyers who are becoming more selective amid rising costs in the market. She noted that buyers are withdrawing from transactions over minor issues because the monthly expenses tied to homebuying have become too significant for them to overlook their wish lists.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios” of last-minute cancellations due to small details. Approximately 2,500 home purchases were canceled in Miami last month, equating to around 17.6% of homes that had gone under contract in June. Corrales emphasized that the root of the problem lies in affordability.
In June, the median home sale price hit a record high of $442,525, while the average interest rate for a 30-year mortgage stood at 6.92%. Coupled with high home prices and persistent mortgage rates, potential buyers face additional hurdles from increased insurance rates, property taxes, HOA fees, and other homeownership costs that have been aggravated by inflation.
This overall lack of affordability has led to a significant downturn in home sales across the nation. Redfin reported that home sales experienced their largest drop in eight months, with a 0.5% decline in June compared to the previous month—marking the steepest decrease since October 2023. Annually, home sales fell by 1.1% and were 21.5% below levels seen before the pandemic.