Realtors are experiencing an increase in buyers withdrawing from home purchases, attributed to a more discerning clientele navigating a challenging real estate market.
A recent report from Redfin indicates that nearly 56,000 home purchase agreements were canceled in June, equating to 15% of all homes that went under contract that month. This marks the highest rate for any June recorded 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 who are unwilling to compromise on their preferences due to the high costs associated with home buying. “They are backing out over minor issues because the monthly expenses linked to purchasing a home today are too significant to accept anything less than their must-have criteria,” Zubiate stated.
Rafael Corrales, another Redfin agent from Miami, described experiencing “nightmare scenarios” with last-minute cancellations for insignificant details, noting that approximately 2,500 home purchases in Miami were canceled last month, representing about 17.6% of contracts. He emphasized that the primary challenge remains affordability.
In June, the median home sale price soared to a record $442,525, while the average rate for a 30-year mortgage reached 6.92%. In addition to high property prices and elevated mortgage rates, potential buyers are also contending with increased insurance, property taxes, homeowners association fees, and other expenses related to home ownership, all of which have been intensified by inflation.
Nationwide affordability issues have led to a significant decline in home sales, which fell 0.5% in June from the previous month—the largest decrease since October 2023, according to Redfin. Year-over-year, home sales saw a 1.1% dip and were 21.5% lower than pre-pandemic levels.