Realtors are facing an increasing number of buyers who are backing out of home purchase agreements, as potential homeowners are becoming more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract. This marks the highest percentage of cancellations recorded for June since the real estate site began its reporting.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers hesitating over comparatively minor issues, driven by the high monthly costs associated with buying a home. She noted that buyers are reluctant to compromise on their wish lists given the steep expenses involved.
Rafael Corrales, a Redfin agent in Miami, reported witnessing “nightmare scenarios” unfold, including last-minute cancellations due to small details. In Miami alone, around 2,500 home purchases were called off last month, representing approximately 17.6% of homes under contract. Corrales emphasized that the core issue at play is affordability.
In June, the median home sale price hit a record $442,525, with the average rate for a 30-year mortgage at 6.92%. The combination of high home prices, elevated mortgage rates, and additional costs such as insurance, property taxes, and HOA fees has been worsened by ongoing inflation, making homeownership increasingly burdensome for buyers.
This overall lack of affordability has led to the most significant decline in home sales nationwide in eight months. Redfin reported a monthly drop of 0.5% in home sales for June, the largest decrease since October 2023. Year-over-year, home sales decreased by 1.1% and stood 21.5% below levels recorded before the pandemic.