Realtors are experiencing an unprecedented number of buyers backing out of home purchase agreements, as consumers become more selective in a challenging real estate market.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes under contract that month. This marks the highest cancellation percentage for any June recorded by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers becoming more choosy. She noted that many are reconsidering their decisions over minor issues, as the financial burden of purchasing a home has intensified. “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.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” with last-minute cancellations over trivial details. In June alone, about 2,500 home purchases were called off in Miami, which accounts for roughly 17.6% of homes that went under contract. Corrales highlighted affordability as the primary challenge for buyers in the current market.
The median home sale price reached a record high of $442,525 in June, coupled with an average 30-year mortgage rate of 6.92%. In addition to high home prices and mortgage rates, buyers are also facing elevated costs related to insurance, property taxes, and HOA fees, all of which are compounded by inflation.
Nationwide affordability issues have led to a significant decline in home sales, with Redfin reporting that sales fell by 0.5% month-over-month in June—the largest decrease since October 2023. Year-over-year sales dipped by 1.1% and were 21.5% below pre-pandemic levels.