Realtors are witnessing an increase in hesitant buyers as individuals become more selective in a challenging real estate environment.
According to a recent report from Redfin, nearly 56,000 home purchase agreements were abandoned in June, accounting for 15% of all homes that went under contract that month. This marks 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, attributes the surge in cancellations to buyers being more discerning in light of rising market costs. She noted, “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.”
Rafael Corrales, a Redfin agent based in Miami, reported witnessing “nightmare scenarios” involving last-minute cancellations over trivial concerns. Approximately 2,500 home purchases were aborted in Miami last month, representing about 17.6% of contracts that were in progress. Corrales emphasized that the primary challenge is affordability.
In June, the median home sale price surged to a record $442,525, with the average interest rate on a 30-year mortgage reaching 6.92%. In addition to high home prices and elevated mortgage rates, prospective buyers are also facing increasing insurance costs, property taxes, HOA fees, and other expenditures linked to homeownership affected by inflation.
This widespread lack of affordability in the housing market has led to the most significant decline in home sales nationwide in eight months. Home sales fell by 0.5% in June compared to the previous month, marking the steepest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than levels seen before the pandemic.