Realtors are experiencing an unprecedented number of buyers backing out of deals as preferences shift in a challenging real estate environment.
In June, nearly 56,000 home-purchase agreements were canceled, amounting to 15% of all homes that entered contracts that month, according to a report from Redfin released on Tuesday. This marks the highest percentage seen in any June since records began.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to more discerning buyers who are navigating a costly market. She noted that potential homeowners are withdrawing from deals due to minor issues since the financial responsibilities of buying a home can be daunting.
Rafael Corrales, a Redfin agent based in Miami, emphasized that he has witnessed troubling situations where buyers canceled purchases at the last minute over trivial details. Miami saw approximately 2,500 home purchases canceled in June, representing about 17.6% of homes under contract during that period. Corrales indicated that the main concern for buyers remains affordability.
The median home sale price surged to a record $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to steep home prices and high mortgage rates, would-be buyers are grappling with rising insurance costs, property taxes, HOA fees, and other homeowner expenses, all impacted by inflation.
This widespread lack of affordability has led to the largest drop in home sales in eight months, as reported by Redfin. Monthly home sales decreased by 0.5% in June—the most significant decline since October 2023. Year-over-year, home sales also experienced a 1.1% drop and were 21.5% lower than levels seen before the pandemic.