Realtors are encountering an increasing number of hesitant buyers as individuals become more selective in the current challenging real estate market.
In June, nearly 56,000 home-purchase agreements, representing 15% of all homes that were under contract during that month, fell through, according to a report from Redfin. This marked the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the increase in buyer reluctance to prospective homeowners facing a costly market. She noted that buyers are backing out of deals over minor issues because the monthly expenses of buying a home are too steep to justify settling for less than their ideal requirements.
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios,” including last-minute cancellations based on trivial details. Last month alone, about 2,500 home purchases were canceled in Miami, accounting for approximately 17.6% of homes that went under contract in June. Corrales emphasized that the core issue remains affordability.
The median home sale price in June hit a record high of $442,525, with the average 30-year mortgage rate standing at 6.92%. In addition to elevated home prices and mortgage rates, potential buyers are also burdened by rising insurance, property taxes, HOA fees, and other homeownership costs exacerbated by inflation.
The nationwide affordability crisis has led to a notable decline in home sales, marking the largest drop in eight months, as reported by Redfin. Month-over-month, home sales decreased by 0.5% in June, the steepest decline since October 2023. Year-over-year, sales declined by 1.1%, and they remain 21.5% below pre-pandemic levels.