Realtors are facing an increase in cautious buyers amid a challenging real estate market. A recent report from Redfin indicated that in June, nearly 56,000 home-purchase agreements were canceled, accounting for 15% of all homes that went under contract that month. This marks the highest rate for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers becoming more selective due to the high costs associated with home buying. “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,” said Zubiate.
Similarly, Rafael Corrales, a Redfin agent in Miami, reported seeing “nightmare scenarios” unfolding, with last-minute cancellations over small details. In Miami alone, approximately 2,500 home purchases were canceled last month, representing about 17.6% of homes that went under contract in June. Corrales noted that the primary concern for buyers is affordability.
The median home price hit a record $442,525 in June, coinciding with an average rate of 6.92% for a 30-year mortgage. In addition to the high home prices and elevated mortgage rates, prospective buyers are also burdened by various costs such as insurance, property taxes, and HOA fees, all of which have been intensified by inflation.
This ongoing lack of affordability has led to a significant decline in home sales across the country, reflecting the most considerable drop in eight months, according to Redfin. Home sales fell by 0.5% month-over-month in June, marking the largest decrease since October 2023. Year-over-year, home sales dropped by 1.1% and were 21.5% lower than pre-pandemic levels.