Realtors are experiencing an unprecedented number of buyers retracting their home purchase agreements, as consumers become increasingly selective in a challenging real estate environment.
Recent data from Redfin highlights that nearly 56,000 home-purchase contracts were canceled in June, representing 15% of all agreements for that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent operating in the San Francisco Bay Area, attributed the trend to a more discerning buyer demographic, which is struggling with escalating market prices. She noted, “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.”
Rafael Corrales, another Redfin agent based in Miami, reported witnessing significant last-minute cancellations over seemingly trivial matters. In June, around 2,500 home purchases were canceled in Miami, equating to roughly 17.6% of homes that went under contract that month. Corrales emphasized that the primary concern is affordability.
The median home sale price surged to a record $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to the high property prices and persistent mortgage rates, prospective buyers are also facing increased burdens from insurance, property taxes, HOA fees, and other homeownership costs heightened by inflation.
The general lack of affordability across the nation has contributed to a significant decline in home sales, as reported by Redfin. Monthly home sales decreased by 0.5% in June, marking the steepest decline since October 2023. Year-over-year, home sales fell by 1.1% and remained 21.5% lower than levels seen before the pandemic.