Realtors are experiencing an increase in hesitant buyers as individuals become more selective in a challenging real estate market.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that had been under contract that month. This marks the highest percentage recorded for any June by the real estate site.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers becoming choosier as they confront a more expensive market. She noted, “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.”
Rafael Corrales, a Redfin agent based in Miami, has witnessed “nightmare scenarios” unfold, including last-minute cancellations over trivial matters. Last month in Miami, approximately 2,500 home purchases were canceled, which accounts for about 17.6% of homes that went under contract in June. Corrales cited affordability as the primary issue.
In June, the median home sale price reached an all-time high of $442,525, while the average rate on a 30-year mortgage was 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are also burdened by expenses such as insurance, property taxes, homeowners association fees, and other ownership costs that have been intensified by inflation.
The national lack of affordability has led to the most significant decline in home sales in eight months, as reported by Redfin. Monthly home sales fell by 0.5% in June, marking the largest drop since October 2023. Comparatively, year-over-year home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.