Realtors are experiencing an unprecedented wave of buyers backing out of home purchases, as potential homeowners become 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 entered contracts during that month. This figure marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are more discerning in light of the expensive market. “They’re retreating over minor details because the monthly costs of buying a home today are too high to justify not securing every item on their must-have list,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales noted experiencing “nightmare scenarios,” with last-minute cancellations stemming from trivial issues. Last month, approximately 2,500 home purchases were scrapped in Miami, equating to 17.6% of homes that went under contract in June. Corrales pointed out that the primary concern for buyers remains affordability.
The median home sale price hit an all-time high of $442,525 in June, while the average interest rate for a 30-year mortgage rose to 6.92%. In addition to the elevated prices and persistent mortgage rates, buyers are also faced with challenges from insurance fees, property taxes, homeowners association dues, and other ownership costs that have been impacted by inflation.
The nationwide affordability crisis has led to the most significant drop in home sales in eight months, according to Redfin. Monthly home sales saw a decline of 0.5% in June, the largest decrease since October 2023. Year-over-year, sales fell 1.1% and were 21.5% below levels observed before the pandemic.