Realtors are experiencing an increasing number of cautious buyers as individuals become more selective amid a challenging real estate market.
In June, nearly 56,000 home-purchase agreements did not go through, representing 15% of all homes that were under contract that month, according to a report from Redfin. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to buyers who are backing out due to minor issues, as the monthly costs of homeownership are now too significant to overlook. Zubiate stated, “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.”
Rafael Corrales, another Redfin agent in Miami, has witnessed what he called “nightmare scenarios” of last-minute cancellations over trivial details. In June alone, approximately 2,500 home purchases were canceled in Miami, accounting for about 17.6% of homes that went under contract. Corrales emphasized that affordability remains the main challenge.
The median sale price of homes reached a record high of $442,525 in June, while the average 30-year mortgage rate stood at 6.92%. In addition to elevated home prices and mortgage rates, potential buyers are also facing additional financial burdens such as insurance, property taxes, and HOA fees, all of which have been intensified by inflation.
The overall lack of affordability in the market has led to the steepest decline in home sales in eight months, as reported by Redfin. On a monthly basis, home sales decreased by 0.5% in June, marking the largest drop since October 2023. Comparatively, home sales fell by 1.1% year-over-year and were 21.5% lower than levels observed before the pandemic.