Realtors are facing an unprecedented number of deal cancellations, as buyers become more selective in a challenging real estate market.
A report from Redfin revealed that nearly 56,000 home-purchase agreements were abandoned in June, accounting for 15% of all homes that went under contract during this period. This marks the highest percentage of deal cancellations ever recorded for the month of June by Redfin.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in canceled agreements to buyers who are increasingly discerning, especially in light of the elevated costs associated with purchasing a home. She noted, “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.”
Rafael Corrales, another Redfin agent based in Miami, reported experiencing “nightmare scenarios” with last-minute cancellations driven by small details. In Miami alone, approximately 2,500 home purchases were canceled in June, representing about 17.6% of homes that entered contract that month. Corrales pointed out that the main concern for buyers is affordability.
The median sale price of homes reached a staggering $442,525 in June, while the average interest rate on a 30-year mortgage stood at 6.92%. In addition to the high home prices and elevated mortgage rates, buyers are facing rising costs from insurance, property taxes, HOA fees, and other expenses related to homeownership that have been impacted by inflation.
The overall lack of affordability has contributed to a significant drop in home sales nationwide, with Redfin reporting that June witnessed the largest decline in eight months. Home sales dipped by 0.5% on a monthly basis, marking the largest decrease since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than levels observed before the pandemic.