Realtors are currently facing an unprecedented number of buyers retracting their home purchase agreements, as buyer preferences become more stringent in a challenging real estate environment. A recent report by Redfin highlights that nearly 56,000 home-purchase agreements, or 15% of all homes that went under contract in June, were abandoned. This marks the highest cancellation rate recorded for any June 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 buyers who are more selective and struggling to navigate an expensive market. 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.”
In Miami, Redfin agent Rafael Corrales reported “nightmare scenarios” of buyers pulling out at the last moment over trivial details. In that area, around 2,500 home purchases were canceled in June, equating to approximately 17.6% of homes under contract. Corrales emphasized that the primary challenge buyers face is affordability.
The median sale price for homes hit an all-time high of $442,525 in June, with average rates for 30-year mortgages reaching 6.92%. In addition to elevated home prices and mortgage rates, potential buyers are facing increased burdens from insurance, property taxes, HOA fees, and other costs linked to homeownership—all heightened by inflation.
Nationwide affordability issues have resulted in the most significant decline in home sales in the last eight months. According to Redfin, home sales fell by 0.5% in June compared to May, marking the largest monthly drop since October 2023. Year-over-year sales also saw a decrease of 1.1%, with figures standing 21.5% below pre-pandemic levels.