The real estate market is experiencing an increase in buyers retracting their home-purchase agreements, with June witnessing almost 56,000 cancellations, amounting to 15% of all contracts during the month. This figure, reported by Redfin, marks the highest rate for the month of June recorded by the platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers becoming more selective due to the high costs of homeownership. She noted that many are backing out over minor issues as they feel compelled to secure everything on their must-have lists, given the current financial pressures.
In Miami, Redfin agent Rafael Corrales described “nightmare scenarios” involving last-minute cancellations over seemingly trivial matters. Last month, around 2,500 home purchases were canceled in Miami, representing approximately 17.6% of the contracts in June. Corrales emphasized that the primary concern driving these decisions is affordability.
The median home sale price reached a historic high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. Alongside these expenses, prospective buyers are contending with increased costs linked to insurance, property taxes, and homeowners association fees, all exacerbated by inflation.
Nationwide, the lack of affordability is contributing to a significant decline in home sales, with Redfin reporting a 0.5% decrease from the previous month—the most considerable drop since October 2023. Year-over-year, home sales fell 1.1% and are now 21.5% below pre-pandemic figures.