Realtors are facing a surge of buyers withdrawing from home purchase agreements as customer expectations shift in a challenging real estate landscape.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were terminated in June, accounting for 15% of all homes that went under contract that month. This marks the highest cancellation rate recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers becoming more selective, largely due to the soaring costs in the current market. “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,” she explained.
In Miami, Redfin agent Rafael Corrales shared that he has encountered what he described as “nightmare scenarios,” including last-minute cancellations over insignificant details. In June alone, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of homes that went under contract. Corrales highlighted affordability as the primary concern for buyers.
The median home sale price reached a record high of $442,525 in June, while the average interest rate on a 30-year mortgage was 6.92%. Buyers are also confronted with various additional costs such as insurance, property taxes, and homeowner association fees, all of which have been intensified by inflation.
As affordability remains a pressing issue nationally, home sales have experienced their largest decline in eight months. According to Redfin, there was a 0.5% decrease in home sales in June compared to the previous month, marking the biggest drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% below pre-pandemic figures.