Realtors are facing an unprecedented number of buyers pulling out of home purchases, attributed to a shortfall in buyer satisfaction amid a challenging real estate landscape.
In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of contracts for that month, as reported by Redfin. This marks the highest percentage ever recorded in June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to buyers being more selective in an expensive market. She noted that many buyers are withdrawing for minor reasons, as the monthly expenses linked to homeownership have become too significant to overlook without fulfilling all their criteria.
Rafael Corrales, another Redfin agent based in Miami, reported “nightmare scenarios” of last-minute deal cancellations over trivial details. In Miami alone, about 2,500 home purchases were scrapped last month, equating to 17.6% of homes that entered contracts. Corrales emphasized that the core issue is still affordability.
As of June, the median home sale price reached a historic $442,525, while the average 30-year mortgage rate stood at 6.92%. In addition to the steep home prices and high mortgage rates, prospective buyers are also challenged by rising costs associated with insurance, property taxes, HOA fees, and other expenses tied to homeownership, further inflating the financial burden.
The widespread lack of affordability has contributed to a significant decrease in home sales across the nation, marking the largest decline in eight months, as indicated by Redfin. Month-over-month, home sales fell by 0.5% in June, reflecting the most considerable decrease since October 2023. Year over year, sales dropped by 1.1%, and they are currently 21.5% lower than levels seen before the pandemic.