Homebuyers Hit the Brakes: Record Cancellations Shake Real Estate Market

Realtors are experiencing an unprecedented number of indecisive buyers as the real estate market presents challenges. A recent report from Redfin reveals that nearly 56,000 home-purchase agreements failed in June, representing 15% of all homes that entered contract that month. This marks the highest percentage of cancellations ever recorded in June by the real estate platform.

Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers who are increasingly selective due to the heightened costs of homeownership. “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.

Similarly, Rafael Corrales, a Redfin agent in Miami, highlighted troubling instances of last-minute cancellations over minor details. In June, about 2,500 home purchases were canceled in Miami, roughly 17.6% of the homes that went under contract during that month. Corrales pointed out that the core issue is affordability.

In June, the median home sale price hit a record high of $442,525, with the average interest rate on a 30-year mortgage at 6.92%. In addition to the steep prices of homes currently on the market, potential buyers are confronting increased costs due to insurance, property taxes, homeowners association fees, and other expenditures that have been aggravated by inflation.

This nationwide affordability crisis has led to a significant drop in home sales, marking the largest decline in eight months, according to Redfin. Home sales decreased by 0.5% from the previous month in June—the largest fall since October 2023. Year-over-year comparisons show a 1.1% decline in home sales, which are now 21.5% lower than pre-pandemic levels.

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