Realtors are encountering a significant number of hesitant buyers as individuals grow more selective in a challenging real estate market. A report from Redfin reveals that nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month, marking the highest percentage ever recorded for June.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributes this trend to buyers who are becoming more discerning against the backdrop of rising market costs. “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,” Zubiate stated.
Rafael Corrales, another Redfin agent based in Miami, described witnessing “nightmare scenarios” where buyers cancel their agreements at the last minute due to trivial details. In June alone, around 2,500 home purchases were withdrawn in Miami, representing approximately 17.6% of homes that went under contract. Corrales emphasized that the primary concern remains affordability.
The median home sale price hit a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. Prospective home buyers are also facing additional financial burdens from insurance, property taxes, HOA fees, and other costs associated with homeownership, all of which have been heightened by inflation.
Nationwide affordability issues have led to the most significant decline in home sales in eight months, according to Redfin. Month-over-month sales fell by 0.5% in June, marking the largest decrease since October 2023. Comparatively, year-over-year home sales decreased by 1.1% and were 21.5% lower than levels seen before the pandemic.