Homebuyers Hit the Brakes: Cancellations Soar Amid Rising Costs

Realtors are encountering an unprecedented number of hesitant buyers as individuals become more selective in a challenging real estate market.

According to a report by Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded in any June by the real estate platform.

Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in buyer cancellations to the heightened expectations of buyers facing a more costly housing market. She noted, “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.”

Rafael Corrales, a colleague from Miami, also reported experiencing “nightmare scenarios,” including last-minute cancellations over trivial details. In Miami, approximately 2,500 home purchases were canceled last month, equating to about 17.6% of homes that went under contract in June. Corrales indicated that the primary concern remains affordability.

The median home sale price reached an all-time high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the elevated home prices and continuing high mortgage rates, prospective buyers face the burden of insurance, property taxes, HOA fees, and other homeownership expenses, all of which have been intensified by inflation.

The nationwide lack of affordability has led to the largest decline in home sales in eight months, according to Redfin. Month-over-month, home sales dropped by 0.5% in June, marking the most significant decrease since October 2023. Additionally, year-over-year sales fell by 1.1%, sitting 21.5% below pre-pandemic levels.

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