Realtors are experiencing an unprecedented number of buyers backing out of home purchase agreements as the real estate market continues to pose challenges for potential homeowners. A recent report from Redfin revealed that in June, nearly 56,000 home-purchase agreements were terminated, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent working in the San Francisco Bay Area, attributed the increase in cancellations to more discerning buyers who are facing a costly market. She noted that buyers are now withdrawing from deals over minor issues, as the financial burden of homeownership has become difficult to justify without fulfilling their essential criteria.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios,” including last-minute cancellations over trivial matters. He stated that around 2,500 home purchases were canceled in Miami alone last month, which translates to approximately 17.6% of homes that went under contract in June. Corrales emphasized that affordability remains the primary concern for buyers.
The median home sale price reached a historic high of $442,525 in June, coupled with an average 30-year mortgage rate of 6.92%. Prospective buyers are further hindered by additional costs such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
According to Redfin, the nationwide lack of affordable housing has contributed to the largest decline in home sales in eight months. On a month-to-month basis, home sales dipped by 0.5% in June, marking the most significant decrease since October 2023. Year-over-year, there was a 1.1% drop in home sales, and current levels are 21.5% lower than those seen before the pandemic.