Real estate agents are facing an increasing number of buyers backing out of home purchases, as consumer preferences shift in a challenging housing market. According to a report from Redfin, nearly 56,000 home-purchase agreements were abandoned in June, representing 15% of all contracts that month, the highest cancellation rate for June on record.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers becoming more selective. They often withdraw from deals over minor issues, as the rising monthly costs of homeownership make it difficult to compromise on their wishlist items.
In Miami, agent Rafael Corrales reported witnessing “nightmare scenarios,” where buyers cancel purchases due to small details. In June alone, approximately 2,500 home purchases were called off in Miami, corresponding to 17.6% of homes under contract that month. Corrales noted that affordability remains a significant concern for potential buyers.
The median home sale price reached an all-time high of $442,525 in June, accompanied by an average mortgage rate of 6.92% for 30-year fixed loans. Alongside these costs, buyers are also facing challenges from rising insurance rates, property taxes, homeowners association (HOA) fees, and other expenses related to homeownership, all intensified by inflation.
These affordability challenges have led to a substantial decline in home sales, with Redfin reporting the largest drop in eight months. Sales fell by 0.5% in June compared to the previous month, marking the steepest decline since October 2023. Year-over-year, home sales decreased by 1.1% and remained 21.5% below levels seen before the pandemic.