Realtors are encountering more hesitant buyers than ever before as people become more selective in a challenging real estate market.
Nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month, according to a Redfin report published Tuesday. This marks the highest percentage of any June recorded by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers grappling with a more expensive market and becoming more selective.
“They’re backing out over minor issues because the monthly costs associated with buying a home today are too high to justify not getting everything on their must-have list,” Zubiate said.
Rafael Corrales, another Redfin agent in Miami, noted that he has witnessed “nightmare scenarios” with last-minute cancellations over small details. Approximately 2,500 home purchases were canceled in Miami last month, constituting about 17.6% of homes that went under contract in June. Corrales highlighted affordability as the biggest issue.
The median home sale price hit a record $442,525 in June, with the average rate on a 30-year mortgage at 6.92%. Besides the high costs of homes and mortgage rates, prospective buyers are also dealing with insurance, property taxes, HOA fees, and other expenses associated with homeownership, all of which have been exacerbated by inflation.
Nationwide affordability issues have led to the biggest decline in home sales in eight months, according to Redfin. On a monthly basis, home sales fell 0.5% in June—the largest drop since October 2023. Year-over-year, home sales dipped 1.1% and were 21.5% below pre-pandemic levels.