Realtors are experiencing an increase in buyers walking away from home purchases as consumers become more discerning in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the uptick in cancellations to buyers who are hesitant due to the high costs associated with purchasing a home. She noted that buyers are backing out over minor issues because the current monthly expenses related to homeownership have become difficult to justify without satisfying their entire wish list.
In Miami, Redfin agent Rafael Corrales reported observing “nightmare scenarios,” including last-minute cancellations due to trivial details. Approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of homes that were under contract in June. However, he emphasized that the primary concern for many buyers is affordability.
The median home sale price hit a record high of $442,525 in June, accompanied by an average 30-year mortgage rate of 6.92%. In addition to high home prices and mortgage rates, prospective buyers are also burdened by additional costs such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
The nationwide affordability crisis has contributed to the largest decline in home sales in eight months, as reported by Redfin. In June, home sales decreased by 0.5% on a monthly basis, marking the most significant drop since October 2023. Year-over-year, sales fell by 1.1% and remain 21.5% below pre-pandemic levels.