Realtors are facing an unprecedented wave of cautious buyers as the real estate market becomes increasingly challenging. Recent data from Redfin indicates that nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes that went under contract, marking the highest rate for that month on record.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the trend to more discerning buyers who are hesitant to commit due to soaring 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 experiencing “nightmare scenarios” with clients canceling deals over trivial details. In June, approximately 2,500 home purchases were called off in Miami, representing around 17.6% of the contracts. Corrales emphasized that the primary challenge is affordability.
The median home sale price reached a record $442,525 in June, coupled with average 30-year mortgage rates soaring to 6.92%. In addition to the steep home prices and high mortgage rates, prospective buyers are also burdened by rising insurance, property taxes, homeowners association fees, and other associated costs that inflation has increasingly strained.
The ongoing lack of affordability has led to a significant drop in home sales nationwide, with Redfin reporting the largest monthly decline in eight months. Home sales decreased by 0.5% in June compared to May, representing the sharpest fall since October 2022. Year-over-year home sales also fell by 1.1% and were 21.5% lower than pre-pandemic levels.