Realtors are experiencing an unprecedented wave of hesitant buyers as individuals become more discerning amidst a challenging real estate landscape.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements failed in June, accounting for 15% of all homes that were under contract that month. This represents the highest percentage ever recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in buyer withdrawals to a more selective clientele facing a costly market. “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,” she explained.
Rafael Corrales, another Redfin agent based in Miami, described the situation as leading to “nightmare scenarios,” including last-minute cancellations over trivial matters. Approximately 2,500 home purchases were called off in Miami in June, equating to about 17.6% of the homes that had entered into contract. He noted, however, that the overarching challenge remains affordability.
The median sale price of homes reached an all-time high of $442,525 in June, coupled with an average 30-year mortgage rate of 6.92%. In addition to the high home prices and elevated mortgage rates, potential buyers are also facing increased costs from insurance, property taxes, HOA fees, and other expenses associated with homeownership, which have been further impacted by inflation.
As affordability issues persist nationwide, home sales have seen their most significant decline in eight months, Redfin reported. Month over month, sales fell by 0.5% in June, marking the largest decrease since October 2023. Year over year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.