Realtors are facing an unprecedented number of cautious buyers as individuals become more selective in a challenging real estate market.
In June, nearly 56,000 home-purchase agreements were canceled, accounting for 15% of all homes that went under contract that month, according to a report from Redfin released on Tuesday. This marks the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are hesitant, particularly due to the 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 explained.
Rafael Corrales, a Redfin agent in Miami, noted alarming trends, including last-minute cancellations over minor details. In June alone, about 2,500 home purchases were called off in Miami, representing around 17.6% of homes that went under contract. Corrales emphasized that the core issue remains affordability.
The median home sale price hit a record $442,525 in June, with the average 30-year mortgage rate at 6.92%. Coupled with already high home prices and persistent mortgage rates, buyers are also facing increased costs related to insurance, property taxes, and homeowners association fees, all of which have been affected by inflation.
The nationwide affordability crisis has led to a significant decline in home sales, with Redfin reporting the most considerable drop in eight months. On a monthly basis, home sales decreased by 0.5% in June, the largest fall since October 2023. Year over year, home sales dropped by 1.1% and were 21.5% lower than pre-pandemic levels.