Realtors are facing an unprecedented number of cautious buyers, as individuals become more selective in a challenging real estate market.
According to a recent report by Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract during that month. This marks the highest percentage of canceled contracts recorded by the real estate platform for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to a more discerning buyer group navigating an expensive market. She noted that buyers are withdrawing from deals over relatively minor issues, mainly because the high monthly costs involved in homeownership cannot justify compromising on their wish lists.
In Miami, Redfin agent Rafael Corrales reported witnessing troubling trends, including last-minute cancellations tied to trivial details. Approximately 2,500 home purchases were abandoned in Miami last month, representing about 17.6% of homes that went under contract in June. He emphasized that the primary concern for buyers is affordability.
In June, the median home sale price reached a record high of $442,525, while the average rate for a 30-year mortgage climbed to 6.92%. Prospective buyers are further burdened by skyrocketing insurance, property taxes, homeowner association fees, and various other costs tied to homeownership, all of which have been intensified by inflation.
The nationwide affordability crisis has led to a significant decline in home sales, marking the greatest drop in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June—the most substantial decline since October 2023. Year-over-year, home sales fell by 1.1% and are currently 21.5% below levels recorded before the pandemic.