Real estate agents are facing an increasing number of buyers withdrawing from home purchase agreements as consumer preferences become more selective in a challenging market. In June, nearly 56,000 agreements were canceled, amounting to 15% of all homes that went under contract that month, marking the highest percentage ever recorded for June, according to a report by Redfin.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers backing out for minor reasons due to the high monthly costs associated with purchasing a home. She notes that buyers want to ensure they meet all their must-have criteria, making them less likely to compromise.
Similarly, Rafael Corrales, a Redfin agent in Miami, reported witnessing troubling situations including last-minute cancellations over trivial details. In Miami, about 2,500 home purchases were canceled in June, representing roughly 17.6% of homes under contract. Corrales highlights that the primary concern for buyers is affordability.
The median sale price for homes hit a record $442,525 in June, while the average interest rate for a 30-year mortgage was 6.92%. Buyers are also facing additional costs related to homeownership, including insurance, property taxes, and homeowners association fees, which have been driven up by inflation.
This affordability crisis has led to the largest decline in home sales in eight months, according to Redfin. Month-over-month home sales decreased by 0.5% in June, the most significant drop recorded since October 2023. Year-over-year, home sales saw a 1.1% decline and were 21.5% below levels seen before the pandemic.