Real estate agents are experiencing an increase in buyers backing out of transactions as people grow more selective in a challenging housing market. A report from Redfin reveals that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that entered contracts that month, marking the highest percentage for June on record.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the rise in canceled deals to buyers being more discerning while facing high market costs. “Buyers are withdrawing over minor issues because the monthly expenses of purchasing a home are too substantial to overlook without getting everything on their must-have list,” Zubiate noted.
Rafael Corrales, a Redfin agent based in Miami, reported encountering “nightmare scenarios,” including last-minute withdrawals over trivial concerns. Approximately 2,500 home purchases were called off in Miami last month, amounting to around 17.6% of homes that entered contracts in June. Corrales pointed out that the primary barrier is affordability.
In June, the median home sale price hit a record $442,525, while the average rate on a 30-year mortgage stood at 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are struggling with rising insurance costs, property taxes, HOA fees, and other expenses tied to homeownership, all worsened by inflation.
The nationwide affordability crisis has led to a significant dip in home sales, which have decreased for the largest monthly drop in eight months, according to Redfin. Home sales fell 0.5% in June compared to May— the largest decline since October 2023. Annually, home sales dropped 1.1%, with figures 21.5% lower than pre-pandemic levels.