Realtors are facing an unprecedented number of buyers backing out of home purchase agreements as the real estate market becomes increasingly challenging. According to a recent report by Redfin, nearly 56,000 home-purchase agreements were canceled in June, which accounts for 15% of all properties that went under contract that month. This figure marks the highest percentage recorded for any June since the website’s inception.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributes this trend to buyers becoming more discerning due to the expensive nature of the market. She noted that buyers are withdrawing from contracts over minor issues because the overall costs linked to home purchases are steep enough that they want to ensure they meet all their criteria.
In Miami, Rafael Corrales, another Redfin agent, reported experiencing what he described as “nightmare scenarios,” including last-minute cancellations over trivial details. Last month alone, about 2,500 home purchases were canceled in Miami, representing 17.6% of the homes that went under contract. Corrales highlighted that affordability is the primary concern for many buyers.
The median home sale price saw a record high of $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. In addition to the elevated home prices and mortgage rates, prospective buyers are also facing additional costs such as insurance, property taxes, and homeowners’ association fees, all made more burdensome by inflation.
Nationwide, the lack of affordability has led to a significant decline in home sales, which experienced the largest decrease in eight months, according to Redfin. Monthly home sales fell by 0.5% in June—the biggest drop since October 2023. Comparatively, home sales dropped 1.1% year-over-year and remain 21.5% below pre-pandemic figures.