In a challenging real estate market, realtors are facing an unprecedented number of buyers backing out of home purchases. A recent report by Redfin revealed that nearly 56,000 home purchase agreements fell through in June, representing 15% of all homes that entered into contracts during that month. This marks the highest rate ever recorded for June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributed this surge in cancellations to increasingly selective buyers who are struggling with higher market costs. She noted that buyers are opting out over minor issues since the monthly expenses associated with buying a home have become harder to justify without fulfilling all their criteria.
Rafael Corrales, a Redfin agent in Miami, described witnessing “nightmare scenarios,” including last-minute cancellations stemming from trivial details. In June alone, approximately 2,500 home purchases in Miami were called off, accounting for about 17.6% of homes that went under contract. Corrales emphasized that the primary concern among buyers is affordability.
The median home sale price hit a record $442,525 in June, with the average rate on a 30-year mortgage at 6.92%. Alongside the high home prices and elevated mortgage rates, potential buyers are also burdened by rising insurance costs, property taxes, homeowners’ association fees, and other homeownership expenses intensified by inflation.
This widespread lack of affordability has led to the most significant decline in home sales seen in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the steepest fall since October 2023. Year over year, home sales declined by 1.1% and were 21.5% lower than levels observed before the pandemic.