Realtors are facing an increasing number of hesitant buyers as individuals become more selective in the challenging real estate market.
In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that went under contract that month, according to a Redfin report released on Tuesday. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributed this rise in cancellations to buyers being more particular. She noted that potential homeowners are backing out over minor issues because the overall costs associated with purchasing a home are currently too high to forgo their essential requirements.
In Miami, Redfin agent Rafael Corrales described witnessing “nightmare scenarios,” including last-minute cancellations due to trivial details. Last month, around 2,500 home purchases were canceled in Miami, amounting to about 17.6% of homes that were under contract in June. Corrales pointed out that the primary concern remains affordability.
The median home sale price in June reached an unprecedented $442,525, with the average rate on a 30-year mortgage at 6.92%. In addition to the high home prices and elevated mortgage rates, potential buyers are also struggling with insurance costs, property taxes, HOA fees, and other expenses linked to homeownership, all worsened by inflation.
Nationwide, the issue of affordability has contributed to the most significant decline in home sales in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, representing the largest drop since October 2023. Year over year, home sales fell by 1.1% and were 21.5% below pre-pandemic levels.