Realtors are experiencing an unprecedented trend of buyers withdrawing from home purchase agreements, as prospective homeowners become increasingly selective in a challenging real estate market. A recent Redfin report revealed that in June, nearly 56,000 home purchase agreements were canceled, equating to 15% of all homes that went under contract during that period. This marks the highest cancellation rate for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to buyers who are hesitant in a pricey market. “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,” Zubiate explained.
Meanwhile, Rafael Corrales, a Redfin agent based in Miami, noted that he has witnessed “nightmare scenarios” with buyers pulling out at the last minute over trivial details. In Miami, approximately 2,500 home purchases were canceled last month, representing about 17.6% of homes under contract in June. This trend reflects a broader concern regarding affordability.
The median home sale price hit a record high of $442,525 in June, and the average rate for a 30-year mortgage reached 6.92%. Along with high home prices and mortgage rates, potential buyers are burdened by additional costs such as insurance, property taxes, and homeowners association fees, all intensified by inflation.
This lack of affordability has contributed to a significant decrease in home sales across the nation, marking the largest decline in eight months. According to Redfin, home sales fell by 0.5% monthly in June, the steepest drop since October 2023. Compared to the previous year, home sales declined by 1.1% and were 21.5% lower than levels seen before the pandemic.