Realtors are facing an unprecedented number of buyers backing out of home purchases as consumers become more discerning in a challenging real estate environment.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage of cancellations recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes the increase in buyers retracting their offers to a more selective clientele struggling with rising costs in the housing market. She explained that many buyers are retracting their offers over minor issues because the financial implications tied to homebuying have become significant, making it hard to overlook unmet requirements.
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios,” including last-minute withdrawals on minor details. In Miami alone, approximately 2,500 home purchases were canceled in June, which is around 17.6% of homes that were under contract. However, he pointed to affordability as the primary concern affecting buyers.
In June, the median home sale price hit an all-time high of $442,525, with the average rate for a 30-year mortgage reaching 6.92%. In addition to high home prices and elevated mortgage rates, prospective buyers are also grappling with increased costs related to insurance, property taxes, homeowner association fees, and other expenses that inflation has made more burdensome.
The nationwide affordability crisis has contributed to a significant decline in home sales, marking the largest drop in eight months, according to Redfin. Home sales fell 0.5% in June compared to the previous month—the most considerable decrease since October 2023. Year-over-year, home sales dipped 1.1% and are now 21.5% lower than pre-pandemic levels.