Realtors are facing an increasing number of buyers withdrawing from home purchases as market conditions become more challenging. According to a report from Redfin, nearly 56,000 purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month, marking the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to a more discerning buyer base amid rising costs of homeownership. “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 stated.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios,” including last-minute cancellations over trivial concerns. Approximately 2,500 home purchases were called off in Miami last month, representing about 17.6% of homes that were under contract in June, with affordability being a major factor.
The median home sale price hit a record high of $442,525 in June, while the average 30-year mortgage rate stood at 6.92%. In addition to elevated home prices and mortgage rates, potential buyers must also contend with insurance, property taxes, HOA fees, and other homeownership costs, which have been further strained by inflation.
This affordability crisis has contributed to a significant downturn in home sales across the United States, with the most substantial decline seen in eight months. Monthly home sales decreased by 0.5% in June— the largest drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.