Realtors are encountering an increasing number of hesitant buyers, as potential homeowners become more discerning in the current challenging real estate landscape.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in buyers backing out to their heightened selectivity in a costly market.
“They are withdrawing due to minor issues because the monthly expenses linked to purchasing a home today are simply too high to justify not attaining everything on their wish list,” Zubiate said.
Rafael Corrales, another Redfin agent based in Miami, reported “nightmare scenarios,” including last-minute cancellations over trivial details. In Miami, around 2,500 home purchases were canceled last month, accounting for about 17.6% of homes that went under contract in June. Corrales emphasized that the main challenge is affordability.
The median home sale price in June hit a record $442,525, with the average rate on a 30-year mortgage at 6.92%. In addition to the elevated home prices and mortgage rates, prospective buyers are also facing burdens from insurance, property taxes, HOA fees, and other ownership costs, all of which have been intensified by inflation.
The nationwide lack of affordability has led to the largest decline in home sales in eight months, according to Redfin. Monthly home sales dropped by 0.5% in June, marking the most significant decrease since October 2022. Year-over-year, home sales fell by 1.1% and were 21.5% lower than levels seen before the pandemic.