Realtors are experiencing an increase in cautious buyers as the challenging real estate market causes potential homeowners to become more selective.
According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that were under contract during that month. This marks the highest percentage for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are being more discerning in today’s expensive 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,” she commented.
Rafael Corrales, another Redfin agent based in Miami, noted seeing “nightmare scenarios” unfold, including last-minute deal cancellations over trivial matters. Last month, around 2,500 home purchases were canceled in Miami, amounting to about 17.6% of homes that went under contract in June. Corrales pointed out that the primary challenge remains affordability.
The median home sale price hit a record $442,525 in June, with the average 30-year mortgage rate at 6.92%. In addition to high home prices and elevated mortgage rates, buyers are also facing increased costs associated with insurance, property taxes, and homeowner association fees, all intensified by inflation.
The overall lack of affordability in the market has led to the most significant decline in home sales in eight months, as reported by Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the largest drop since October 2023. On a yearly basis, home sales fell by 1.1% and were found to be 21.5% lower than pre-pandemic levels.