Realtors are facing an increasing number of buyers who are hesitant to commit, as preferences shift amid a challenging real estate landscape.
A recent report from Redfin highlights that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all properties that were under contract that month—marking the highest June cancellation rate recorded by the site.
Julie Zubiate, a Redfin Premier agent based in the San Francisco Bay Area, attributed this surge in buyer withdrawals to a more discerning clientele struggling with the steep costs associated with home buying today.
“They are backing out over minor issues because the monthly expenses tied to purchasing a home are simply too high to overlook if they don’t get everything on their wish list,” Zubiate explained.
Similarly, Rafael Corrales, a Redfin agent in Miami, described “nightmare scenarios” involving last-minute deal cancellations due to small details. Last month, around 2,500 home purchases were called off in Miami, which accounts for roughly 17.6% of homes under contract in June. Yet, Corrales emphasized that the primary concern among buyers is affordability.
In June, the median home sale price soared to a record high of $442,525, coupled with an average 30-year mortgage rate of 6.92%. Prospective homeowners are further burdened by escalating insurance costs, property taxes, HOA fees, and other expenses linked to homeownership, all intensified by inflation.
The widespread affordability crisis has led to a significant decline in home sales nationally, with Redfin reporting that June saw the largest month-over-month decrease in eight months, at a 0.5% drop. Compared to the previous year, home sales fell 1.1% and stood at 21.5% below levels observed before the pandemic.