Realtors are facing an increasing number of buyers backing out of home purchases as the real estate market becomes more challenging and buyers become more selective. According to a Redfin report released on Tuesday, nearly 56,000 purchase agreements fell through in June, representing 15% of all homes that went under contract that month, marking the highest percentage recorded for any June.
Julie Zubiate, a Premier real estate agent for Redfin in the San Francisco Bay Area, attributes the rise in cancellations to buyers becoming cautious about the costs associated with homeownership in today’s market. She noted that buyers are withdrawing from deals over minor issues because the financial burden of buying a home is significant, and they are determined to meet all their must-have criteria.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios,” including last-minute cancellations due to small details. Approximately 2,500 home purchases were scrapped in Miami last month, accounting for about 17.6% of homes that went under contract in June. He emphasized that the core issue is affordability.
The median home sale price reached a historical high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. Alongside rising home prices and persistent high mortgage rates, potential buyers are also facing additional burdens from insurance, property taxes, and homeowners’ association fees, all of which have been worsened by inflation.
The nationwide affordability crisis has led to a significant decline in home sales, with Redfin reporting the most substantial drop in eight months. Monthly home sales decreased by 0.5% in June, the largest decline since October 2023. Year-over-year, sales fell by 1.1% and were down 21.5% from pre-pandemic levels.