Realtors are encountering an increasing number of hesitant buyers as the real estate market becomes more challenging. According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that were under contract for the month. This marks the highest percentage recorded for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers being more discerning amid rising costs in the housing 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 noted.
In Miami, Redfin agent Rafael Corrales mentioned that he has witnessed “nightmare scenarios” with last-minute cancellations over trivial details. Approximately 2,500 home purchases were called off in Miami last month, representing about 17.6% of homes that were under contract in June. Corrales pointed out that the primary concern for buyers is affordability.
In June, the median home sale price hit a record high of $442,525, with the average rate on a 30-year mortgage at 6.92%. Alongside the elevated home prices and high mortgage rates, prospective buyers are further burdened by costs related to insurance, property taxes, HOA fees, and other homeownership expenses, all of which have been negatively impacted by inflation.
The widespread lack of affordability across the nation has led to the most significant decline in home sales seen in eight months, as reported by Redfin. Monthly home sales dipped by 0.5% in June, the largest fall since October 2023. Year-over-year, sales decreased by 1.1% and were 21.5% below levels seen before the pandemic.