Realtors are encountering an unprecedented number of hesitant buyers as consumers become more selective in a challenging real estate landscape.
According to a recent Redfin report, nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that entered into contracts during that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this increase in buyer uncertainty to the high costs associated with purchasing a home. “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 stated.
In Miami, fellow Redfin agent Rafael Corrales has witnessed “nightmare scenarios,” with last-minute cancellations stemming from small details. In June alone, approximately 2,500 home purchases in Miami were canceled, representing about 17.6% of homes that went under contract. Corrales pointed out that the primary concern for many buyers is affordability.
The median home sale price reached a staggering $442,525 in June, while the average rate on a 30-year mortgage stood at 6.92%. Alongside high home prices and still-elevated mortgage rates, potential buyers are also facing challenges from insurance, property taxes, homeowners association fees, and various other costs related to homeownership, all of which have been intensified by inflation.
This overall lack of affordability across the nation has contributed to the most significant drop in home sales in eight months, according to Redfin. On a month-over-month basis, home sales decreased by 0.5% in June, marking the largest decline since October 2022. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.