Realtors are encountering an increasing number of buyers backing out of deals as the housing market becomes more challenging. A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, 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 in the San Francisco Bay Area, attributed the trend of buyers pulling out to increased selectivity in a market where the costs are high. She noted that buyers are reconsidering their purchases over relatively minor issues because the financial commitment associated with buying a home has become significant.
In Miami, fellow Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” involving last-minute cancellations for small details. Approximately 2,500 home purchases were canceled in Miami last month, amounting to about 17.6% of homes under contract in June. Corrales emphasized that affordability remains the primary concern for buyers.
In June, the median home sale price hit a record high of $442,525, while the average interest rate for a 30-year mortgage stood at 6.92%. In addition to steep home prices and elevated mortgage rates, prospective buyers face rising costs related to insurance, property taxes, HOA fees, and other expenses tied to homeownership, all of which have been worsened by inflation.
The widespread lack of affordability has led to a notable decline in home sales across the country, with Redfin reporting the biggest decrease in eight months. Home sales fell by 0.5% in June compared to the previous month, representing the largest drop since October 2022. Year-over-year, sales dipped by 1.1% and were 21.5% below levels seen before the pandemic.