Realtors are facing an unprecedented number of buyers backing out of home purchases, driven by increased selectiveness in a challenging real estate environment. A recent report from Redfin reveals that nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes that went under contract during that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to more discerning buyers who are hesitant to commit amidst rising costs. She noted that buyers are withdrawing over minor issues since the financial burden of homeownership has become significant.
In Miami, Redfin agent Rafael Corrales reports experiencing “nightmare scenarios” with last-minute cancellations due to minor details, with approximately 2,500 home purchases canceled last month, representing 17.6% of homes that went under contract in June. He highlighted that the central concern for buyers is affordability.
The median home sale price in June reached a record $442,525, accompanied by an average 30-year mortgage rate of 6.92%. In addition to the high home prices and mortgage rates, prospective buyers are also burdened by insurance, property taxes, HOA fees, and other costs related to homeownership, which have been heightened by inflation.
This nationwide affordability crisis has resulted in the largest decline in home sales in eight months, as reported by Redfin. Home sales dropped 0.5% in June compared to the previous month, marking the most significant decrease since October 2023. Year-over-year, home sales declined by 1.1% and remained 21.5% below pre-pandemic levels.