Realtors are facing a surge in buyers backing out of home purchases as the real estate market becomes increasingly challenging. According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed this trend to buyers being more selective as they navigate a costly housing market. She noted that many buyers are pulling out over minor issues, feeling that the current high monthly costs make it essential to meet all of their requirements when purchasing a home.
Rafael Corrales, a Redfin agent in Miami, highlighted extreme examples of cancellations, mentioning that around 2,500 home purchases were scrapped in June, which is about 17.6% of contracts in that area. He emphasized that the primary concern for buyers is affordability.
The median home sale price reached an all-time high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the high prices and elevated mortgage rates, potential buyers are also facing increased costs from insurance, property taxes, and homeowners association fees, all of which have been impacted by inflation.
This affordability crisis has contributed to a significant decline in home sales nationwide, with Redfin reporting a 0.5% month-over-month decrease in June—the largest drop since October 2022. Year-over-year, home sales have declined by 1.1% and are currently 21.5% lower than pre-pandemic levels.