In June, a staggering 15% of homes that went under contract were canceled, amounting to around 56,000 cancellations. According to Redfin, this marks the highest percentage of cancellations in any June on record. But cancellations weren’t the only notable trend last month. Here’s what else Redfin reported:
- Price Cuts: 20% of homes for sale had a price cut, the highest June share on record.
- Home Sales: Sales fell roughly 1% month-over-month, the biggest drop since October.
- Sellers’ Struggle: Many sellers are dropping prices because their homes are sitting on the market.
- Median Sale Price: The median home sale price rose 4% year-over-year to a record $442,525.
My Take
The level of cancellations is certainly problematic, but it doesn’t entirely surprise me. Given the high monthly costs associated with buying a home today, I understand why buyers might feel they bit off more than they could chew. On top of that, buyers are getting more selective. If they don’t get nearly everything on their must-have lists, they’re willing to walk away, which is why we saw purchase cancellations hit a record high in June.
That said, I believe this trend will reverse once the Fed cuts interest rates and mortgage rates fall. Until then, sellers may need to be more flexible on pricing and terms to attract and retain committed buyers. Unfortunately, at this time and in the near future, buyers have the upper hand. Sellers should be ready to bend over backward to keep their buyers from walking away, even if emotions run high. Any cancellation now could result in a lower home sale price in the future.
AriZona Real Estate insider! 
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