Realtors are experiencing an increase in buyers retracting from home purchase agreements, with a significant number of contracts falling through amid a challenging real estate environment.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that were under contract that month. This marks the highest percentage of cancellations recorded for any June in the site’s history.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the rise in indecisiveness to buyers becoming more selective as they navigate a high-cost market. She noted that many are backing out over minor issues due to the steep monthly expenses associated with purchasing a home today.
In Miami, another Redfin agent, Rafael Corrales, reported witnessing many problematic situations, including last-minute contract cancellations over trivial details. Last month in Miami, approximately 2,500 home purchases were canceled, accounting for about 17.6% of the homes that went under contract in June. Corrales highlighted that the main challenge continues to be affordability.
June saw the median home sale price reach a record $442,525, with the average rate for a 30-year mortgage at 6.92%. In addition to the elevated home prices and high mortgage rates, potential buyers are also facing rising costs from insurance, property taxes, homeowners association fees, and other expenses related to homeownership, all aggravated by inflation.
The national affordability crisis has led to a significant drop in home sales, marking the largest decline in eight months, as reported by Redfin. Month-over-month, home sales dipped by 0.5% in June, representing the steepest decrease since October 2023. Year-over-year, sales fell by 1.1% and were down 21.5% compared to levels seen before the pandemic.