Realtors are facing an unprecedented trend of buyers backing out of home purchases, with a growing number of individuals becoming more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home purchase agreements were canceled in June, representing 15% of all agreements made that month. This marks the highest percentage for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this increase in cancellations to buyers who are refusing to compromise on their criteria, especially as the monthly costs of home ownership have risen significantly.
“They’re pulling 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 explained.
In Miami, Redfin agent Rafael Corrales noted that he has witnessed “nightmare scenarios,” including last-minute cancellations over trivial matters. Approximately 2,500 home purchases were canceled in Miami last month, amounting to about 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern remains affordability.
June saw the median home sale price reach a record high of $442,525, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the elevated home prices and persistently high mortgage rates, potential buyers are also grappling with rising costs related to insurance, property taxes, homeowners association fees, and other ownership expenses, all worsened by inflation.
As affordability issues continue to plague the market across the nation, home sales have experienced their most significant drop in eight months, according to Redfin. Monthly sales decreased by 0.5% in June—the largest decline since October 2023. Comparatively, year-over-year home sales declined by 1.1% and were recorded at 21.5% lower than pre-pandemic levels.