Realtors are facing an unprecedented number of cautious buyers as individuals grow more selective in a challenging real estate environment.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were abandoned in June, representing 15% of all homes that were under contract that month. This marks the highest percentage for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in second thoughts to buyers who are navigating a pricier market.
“Many are backing out over minor issues because the monthly costs tied to purchasing a home today are simply too high to justify not securing every item on their wish list,” Zubiate explained.
Rafael Corrales, a Redfin agent based in Miami, reported encountering “nightmare scenarios” with last-minute cancellations over trivial matters. Approximately 2,500 home sales were canceled in Miami last month, accounting for about 17.6% of contracts. Corrales pointed out that the primary concern is affordability.
The median home sale price reached a record $442,525 in June, while the average 30-year mortgage rate stood at 6.92%. Alongside the elevated home prices and high mortgage rates, potential buyers are also grappling with the added burden of insurance, property taxes, HOA fees, and other expenses related to homeownership, all intensified by inflation.
This lack of affordability has led to the most significant decline in home sales nationwide in the past eight months, according to Redfin. Monthly home sales fell by 0.5% in June, marking the largest decline since October 2023. Additionally, year-over-year home sales dropped by 1.1% and were 21.5% lower than figures seen before the pandemic.