Realtors are facing an increasing number of cautious buyers in a challenging real estate market. According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, which accounted for 15% of all homes under contract that month. This marks the highest cancellation rate recorded for June by the real estate firm.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributed this trend to a more selective buyer demographic. She explained that potential homeowners are withdrawing from transactions due to relatively minor issues, realizing that the financial commitments associated with home buying are significant. “The monthly costs to buy a home today are just too high to rationalize not getting everything on their must-have list,” Zubiate stated.
Rafael Corrales, a Redfin agent in Miami, reported troubling scenarios, including last-minute cancellations over trivial details. In June alone, about 2,500 home purchases were scrapped in Miami, translating to approximately 17.6% of homes that entered into contract. Corrales highlighted affordability as the predominant problem affecting sales.
The median home sale price reached a staggering $442,525 in June, with the average 30-year mortgage rate hitting 6.92%. Alongside rising home prices and high mortgage rates, potential buyers are also confronted with increased costs related to insurance, property taxes, homeowners’ association fees, and other expenses linked to homeownership, which inflation has further intensified.
Overall, the national affordability crisis has led to a significant drop in home sales, marking the largest decline in eight months, as reported by Redfin. On a month-to-month basis, home sales saw a 0.5% decrease in June, the most substantial fall since October 2023. Year-over-year, home sales declined by 1.1% and remain 21.5% lower than pre-pandemic levels.