Realtors are experiencing an unprecedented rise in buyers backing out of home purchases as the real estate market becomes increasingly challenging. According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes under contract for that month. This marks the highest percentage recorded for June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in canceled contracts to buyers being more discerning due to heightened market costs. She noted that many buyers are withdrawing from deals over minor concerns because the overall expenses of purchasing a home have surged, making it essential for them to find everything on their wishlist.
Rafael Corrales, a Redfin agent in Miami, highlighted that he has witnessed troubling instances where buyers have withdrawn at the last moment over trivial matters. Last month, approximately 2,500 home purchases were canceled in Miami, equating to about 17.6% of homes under contract in June. According to Corrales, the primary issue is affordability.
In June, the median home sale price hit a record high of $442,525, while the average rate for a 30-year mortgage rose to 6.92%. Prospective buyers are further burdened by additional costs such as insurance, property taxes, and homeowners’ association fees, which have all escalated due to inflation.
This widespread lack of affordability has led to the most significant decline in home sales in eight months, with Redfin reporting a 0.5% drop in sales for June—the largest since October 2023. Year-over-year, home sales fell 1.1% and remained 21.5% below pre-pandemic levels.