In an increasingly challenging real estate market, realtors are witnessing a surge in homebuyers backing out of purchase agreements, marking a notable shift in buyer behavior. A report from Redfin has revealed that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all contracts initiated during that month—the highest percentage recorded for June to date.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributes this trend to buyers becoming more selective as they navigate a higher-cost market. According to Zubiate, buyers are often reconsidering their decisions over seemingly minor issues, driven largely by the difficult economics of homeownership.
Rafael Corrales, a Redfin agent in Miami, echoed these sentiments, describing various “nightmare scenarios” faced by buyers, including last-minute cancellations triggered by trivial matters. In Miami alone, approximately 2,500 home purchases were canceled last month, accounting for about 17.6% of contracted homes in June. Corrales emphasizes the overarching challenge of affordability, which has become a significant barrier for many potential buyers.
The situation is further complicated by the rising median home sale price, which hit a record high of $442,525 in June. Additionally, the average 30-year mortgage rate now stands at 6.92%. Homebuyers are also confronted with increased costs related to insurance, property taxes, and homeowners’ association fees—factors that have been worsened by ongoing inflation.
This widespread lack of affordability is reflected in a broader decline in home sales, with Redfin noting a 0.5% decrease monthly in June—the most substantial drop since October 2023. Year-over-year, home sales have decreased by 1.1%, placing them 21.5% below pre-pandemic levels.
While the current situation presents significant challenges for those looking to buy homes, it also opens the door for prospective buyers to take their time and find properties that truly meet their needs and budget. As the market continues to adjust, buyers may ultimately benefit from increased negotiating power and greater options as sellers respond to the changing landscape.