Realtors are encountering an increasing number of hesitant buyers as individuals become more selective in a challenging real estate climate.
In June, nearly 56,000 home purchase agreements were terminated, representing 15% of all homes that were under contract during the month, according to a report from Redfin released on Tuesday. This marks the highest cancellation rate recorded for any June by the real estate company.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in buyer hesitancy to a more discerning clientele facing a costly market. She noted that buyers are retreating from deals over relatively minor issues because the financial commitments linked to purchasing a home are simply too burdensome to overlook their essential requirements.
Rafael Corrales, another Redfin agent based in Miami, reported witnessing “nightmare scenarios,” which include last-minute cancellations over trivial details. In fact, around 2,500 home sales were canceled in Miami last month, amounting to approximately 17.6% of homes that were under contract in June. Corrales emphasized, however, that the main concern remains affordability.
In June, the median home sale price soared to a historic $442,525, with the average rate for a 30-year mortgage hitting 6.92%. In addition to these high property prices and persistent mortgage rates, potential buyers are further burdened by rising insurance costs, property taxes, homeowners association (HOA) fees, and other expenses related to homeownership that have been heightened by inflation.
This growing lack of affordability has led to the most significant decline in home sales across the nation in eight months, as noted by Redfin. Month-over-month, home sales decreased by 0.5% in June, representing the largest dip since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.