Realtors are encountering an unprecedented number of hesitant buyers as consumers become increasingly selective in a challenging real estate market.
Recent data from Redfin indicates that approximately 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in buyer apprehension to the current market’s high costs. “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,” Zubiate explained.
Rafael Corrales, another agent with Redfin in Miami, reported witnessing what he described as “nightmare scenarios,” including last-minute cancellations over trivial concerns. In Miami alone, about 2,500 home purchases were canceled in June, amounting to roughly 17.6% of homes that went under contract. Corrales noted that the primary issue remains affordability.
In June, the median home sale price reached an all-time high of $442,525, while the average rate for a 30-year mortgage was recorded at 6.92%. In addition to the high prices and mortgage rates, potential homebuyers are facing additional financial burdens from insurance, property taxes, homeowners association fees, and other costs of homeownership, all of which have been heightened by inflation.
The national decline in affordability has led to the most significant drop in home sales in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the largest decline since October 2023. Year-over-year sales also fell by 1.1% and were 21.5% lower than pre-pandemic levels.