Realtors are facing an unprecedented wave of buyers backing out of home purchases amid a challenging real estate landscape. A recent report from Redfin reveals that in June, nearly 56,000 home-purchase agreements were canceled, equating to 15% of all homes that went under contract that month. This figure marks the highest percentage for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes this trend to increasingly selective buyers who are wary of the high monthly costs associated with homeownership. She noted that buyers are more likely to withdraw from deals over minor issues, as the current financial demands make it difficult to settle for anything less than their desired criteria.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” where buyers pulled out at the last minute due to trivial details. Last month alone, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of homes that went under contract in June. Corrales emphasized that the principal concern for buyers is affordability.
The median home sale price soared to a record $442,525 in June, with the average interest rate on a 30-year mortgage reaching 6.92%. In addition to the already high prices and mortgage rates, buyers are confronted with additional expenses such as insurance, property taxes, homeowners association (HOA) fees, and other costs linked to homeownership, all of which have been further strained by inflation.
This growing lack of affordability has led to a significant decline in home sales across the country, marking the largest drop in eight months. According to Redfin, home sales decreased by 0.5% in June—this represents the biggest drop since October 2023. Year-over-year statistics reveal a 1.1% decline in home sales, which stands 21.5% lower than pre-pandemic figures.