Realtors are facing an increase in hesitant buyers as individuals become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation rate recorded by the real estate site for any June.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are becoming more discerning in light of higher market prices. She noted that buyers are often backing out of deals over minor issues, as the current monthly costs associated with buying a home are increasingly difficult to justify without securing every item on their essential checklist.
Rafael Corrales, another agent with Redfin in Miami, reported experiencing “nightmare scenarios,” where buyers cancel purchases at the last minute over small details. Approximately 2,500 home purchases were canceled in Miami last month alone, equating to around 17.6% of homes that went under contract during June. Corrales highlighted that the primary concern for buyers is affordability.
In June, the median home sale price hit a record high of $442,525, while the average rate for a 30-year mortgage rose to 6.92%. The combination of elevated home prices, high mortgage rates, and additional costs such as insurance, property taxes, and homeowners association fees—further intensified by inflation—has made homeownership increasingly burdensome for potential buyers.
This lack of affordability has contributed to a significant decline in home sales across the nation, with Redfin noting that sales dropped by 0.5% from the previous month, marking the largest decrease since October 2023. Year-over-year, home sales fell by 1.1% and are now 21.5% below pre-pandemic levels.