Realtors are encountering a growing trend of hesitant buyers amidst a challenging real estate market.
In June, nearly 56,000 home-purchase agreements were abandoned, constituting 15% of all homes that went under contract during that month, according to a report by Redfin published on Tuesday. This marks the highest percentage of canceled contracts recorded in June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the increase in cancellations to buyers becoming more discerning in the face of a pricier 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,” Zubiate explained.
Rafael Corrales, another Redfin agent in Miami, shared that he has witnessed “nightmare scenarios,” including last-minute withdrawals over trivial details. Approximately 2,500 home purchases were canceled in Miami last month, amounting to around 17.6% of homes that went under contract in June. According to Corrales, the primary concern is still affordability.
In June, the median home sale price hit a record of $442,525, while the average rate for a 30-year mortgage was reported at 6.92%. Along with elevated home prices and persistent high mortgage rates, potential buyers are also contending with rising costs related to insurance, property taxes, HOA fees, and other expenses tied to homeownership, which have become more pronounced due to inflation.
The widespread issue of affordability has led to a significant decrease in home sales nationwide, with Redfin reporting that June experienced its largest sales drop in eight months. Home sales saw a decline of 0.5% compared to the previous month—the most substantial decrease since October 2023. Year-over-year, home sales fell by 1.1% and remained 21.5% below levels seen prior to the pandemic.