In June, nearly 56,000 home-purchase agreements, accounting for 15% of all homes contracted that month, were canceled, marking the highest figure for June reported by Redfin. As the real estate market becomes increasingly challenging, many homebuyers are becoming more discerning.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this rise in cancellations to buyers being more selective in a high-cost market. She noted that clients are opting out for minor issues, as the monthly expenses associated with homeownership are significant enough to warrant meeting all their requirements.
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios” with last-minute withdrawals over trivial concerns, with about 2,500 home purchases canceled in the region last month, representing approximately 17.6% of contracts. He emphasized that affordability is the primary concern for buyers.
The median home price reached a record high of $442,525 in June, coupled with an average 30-year mortgage rate of 6.92%. Alongside elevated home prices, potential buyers face additional burdens from insurance, property taxes, HOA fees, and other ownership costs that have all risen due to inflation.
The nationwide affordability crisis has contributed to a notable decline in home sales, which saw their most significant drop in eight months, according to Redfin. Month-over-month sales fell 0.5% in June, marking the largest decrease since October 2023. Year-over-year, home sales dropped by 1.1% and were also 21.5% lower than pre-pandemic figures.