Realtors are facing an unprecedented number of buyers backing out of home purchases as consumers become increasingly selective in a challenging real estate market.
A recent report by Redfin reveals that 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 percentage of cancellations for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, suggested that the increase in buyers retracting their offers can be attributed to the expensive housing market. “Buyers are withdrawing due to minor issues because the monthly costs associated with purchasing a home are too high to justify compromising on their must-have list,” she stated.
Miami-based Redfin agent Rafael Corrales described witnessing “nightmare scenarios” with last-minute cancellations over minor details. In June, approximately 2,500 home purchases were canceled in Miami, which accounts for about 17.6% of homes that entered into contracts that month. Corrales emphasized that affordability remains the primary concern.
The median home sale price hit a record high of $442,525 in June, with the average 30-year mortgage rate reaching 6.92%. In addition to the steep prices for available homes and elevated mortgage rates, prospective buyers are burdened by insurance, property taxes, homeowners association fees, and other costs associated with homeownership, all of which have been worsened by inflation.
According to Redfin, the nationwide housing market is experiencing its largest decline in home sales in eight months due to affordability challenges. Home sales fell by 0.5% month-over-month in June, the steepest drop since October 2023. Year-over-year comparisons show a decline of 1.1%, with sales 21.5% below levels observed before the pandemic.