Realtors are facing an increasing number of buyers withdrawing from home purchases, as individuals become more selective in a challenging real estate environment.
In June, nearly 56,000 home-purchase agreements fell through, accounting for 15% of all homes that went under contract that month, according to a report from Redfin. This represents the highest percentage of cancellations for any June recorded by the real estate service.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are more discerning due to the elevated costs in today’s market. 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.”
Similarly, Rafael Corrales, a Redfin agent in Miami, reported having witnessed troubling cancellation scenarios, including last-minute withdrawals over insignificant details. In Miami, approximately 2,500 home purchases were canceled in June, representing about 17.6% of homes under contract that month. Corrales highlighted affordability as the primary concern for buyers.
In June, the median home sale price reached a record high of $442,525, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the elevated home prices and ongoing high mortgage rates, prospective buyers are also burdened by insurance, property taxes, HOA fees, and other costs of homeownership, all intensified by inflation.
The challenging affordability landscape nationwide has led to a notable decline in home sales, marking the largest drop in eight months, according to Redfin. Home sales decreased by 0.5% in June compared to the previous month, the most significant drop since October 2023. Year-over-year, sales fell by 1.1% and were down 21.5% from pre-pandemic levels.