Realtors are encountering a growing number of hesitant buyers as the current real estate market becomes increasingly challenging. A report from Redfin reveals that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that entered contracts that month, marking the highest percentage recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to buyers who have become more selective amidst high market prices. “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 explained.
Miami-based Redfin agent Rafael Corrales also reported instances of “nightmare scenarios,” including last-minute deal cancellations over minor details. In June, around 2,500 home purchases were canceled in Miami, equating to about 17.6% of homes under contract that month. Corrales noted that the primary hurdle remains affordability.
The median home sale price reached an all-time high of $442,525 in June, while the average rate for a 30-year mortgage was recorded at 6.92%. Alongside the elevated home prices and still-high mortgage rates, potential buyers are also burdened by additional costs like insurance, property taxes, and HOA fees, all of which have been pushed higher by inflation.
This overarching lack of affordability in the market has led to the most significant decline in home sales in eight months, as reported by Redfin. Month-over-month, home sales slipped 0.5% in June—the largest decrease since October 2023. Year-over-year comparisons show a 1.1% dip in home sales, and sales are currently 21.5% lower than pre-pandemic levels.