Realtors are facing an unprecedented number of buyers walking away from deals as preferences become more stringent amid a challenging real estate market.
According to a report from Redfin released Tuesday, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract during that month. This marks the highest percentage of cancellations recorded in June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the increase in buyer cancellations to a more discerning clientele struggling with the high costs associated with purchasing a home. “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,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales has observed “nightmare scenarios,” citing last-minute contract cancellations over minor details. Approximately 2,500 home purchases were scrapped in Miami last month, which is about 17.6% of homes that went under contract in June. However, Corrales emphasized that the main concern among buyers is affordability.
The median home sale price reached a record high of $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. Alongside the steep prices of homes and elevated mortgage rates, prospective buyers are facing additional challenges from insurance, property taxes, homeowners association fees, and other costs of homeownership, all further complicated by inflation.
The national affordability crisis has contributed to the most significant decline in home sales in eight months, as reported by Redfin. Home sales saw a monthly decrease of 0.5% in June—the largest drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% below pre-pandemic levels.