Realtors are facing an unprecedented number of homebuyers backing out of agreements as consumers become more discerning in a challenging real estate environment. According to a new report from Redfin, nearly 56,000 home-purchase agreements, accounting for 15% of all homes that went under contract in June, were withdrawn. This marks the highest percentage for June noted by the real estate firm.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to buyers who are facing a more costly market and are unwilling to compromise on their wish lists. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” Zubiate remarked.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios,” with buyers canceling last-minute over trivial matters. Approximately 2,500 home purchases were scrapped in Miami last month, translating to around 17.6% of homes that were under contract in June. Corrales noted that affordability remains the primary concern for these buyers.
In June, the median home sale price hit a record $442,525, while the average 30-year mortgage rate was 6.92%. With the elevated home prices, ongoing high mortgage rates, and additional costs related to insurance, property taxes, and homeowners association fees—further aggravated by inflation—many prospective homebuyers are finding it increasingly difficult to afford a new home.
The overall lack of affordability has led to the most significant drop in home sales in eight months, as reported by Redfin. Monthly home sales decreased by 0.5% in June, marking the largest decline since October 2023. Year-over-year sales fell by 1.1%, showing a stark contrast of 21.5% below pre-pandemic levels.