Realtors are encountering an increasing number of buyers withdrawing from home purchases, as prospective homeowners become more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were terminated in June, which constitutes 15% of all homes that went under contract that month. This marks the highest cancellation rate for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent active in the San Francisco Bay Area, attributed the surge in cancellations to buyers who are more discerning and facing elevated prices. “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,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales noted instances of “nightmare scenarios,” where buyers canceled deals at the last minute due to insignificant details. Approximately 2,500 home purchases were canceled in Miami last month, which is about 17.6% of the homes that were under contract in June. Corrales pointed out that the primary concern is still affordability.
The median home sale price reached a record high of $442,525 in June, with the average rate on a 30-year mortgage standing at 6.92%. Buyers are also facing challenges from rising insurance costs, property taxes, HOA fees, and other homeownership expenses that have been impacted by inflation.
The growing lack of affordability has led to a notable decline in home sales across the nation, with Redfin reporting the largest drop in eight months. Monthly home sales fell by 0.5% in June, the biggest decrease since October 2023. Year-over-year, home sales decreased by 1.1% and were found to be 21.5% below pre-pandemic levels.