Realtors are facing an increasing number of buyers who are backing out of home purchases as individuals become more selective in a challenging real estate market.
According to a report by Redfin, nearly 56,000 agreements to buy homes were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to a more discerning buyer who is contending with elevated market costs. She noted that buyers are withdrawing from deals over minor issues because the overall expenses associated with purchasing a home today are simply too significant to overlook without meeting all their requirements.
Rafael Corrales, a Redfin agent in Miami, described witnessing “nightmare scenarios,” including last-minute cancellations triggered by small details. In June, approximately 2,500 home purchases were canceled in Miami, amounting to about 17.6% of homes under contract that month. He emphasized that the primary concern remains affordability.
June saw the median home sale price hit a record high of $442,525, coupled with an average 30-year mortgage rate of 6.92%. Alongside high property prices and elevated mortgage rates, potential buyers are facing compounded costs from insurance, property taxes, HOA fees, and other homeownership expenses, which have been worsened by inflation.
This lack of affordability across the nation has contributed to a significant decline in home sales, with Redfin reporting the largest decrease in eight months. Month-over-month, home sales fell by 0.5% in June, the steepest drop since October 2023. Year-over-year comparisons reveal a 1.1% decline in sales, with figures 21.5% lower than pre-pandemic levels.