In a challenging real estate landscape, Realtors are encountering an increasing number of buyers who are hesitant to follow through with purchases. A report from Redfin indicates that nearly 56,000 home-purchase agreements, representing 15% of all contracts in June, were canceled. This figure marks the highest percentage for any June recorded by the platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers being more selective in a costly market. She noted that buyers are withdrawing over minor issues, as the financial commitment of homeownership has become substantial, making them unwilling to compromise on their essential requirements.
Rafael Corrales, a Redfin agent in Miami, reported witnessing extreme cases where buyers canceled deals at the last minute over trivial details. Last month, approximately 2,500 home purchases were canceled in Miami, equating to around 17.6% of contracts. Corrales pointed out that affordability remains the primary concern for buyers.
The median home sale price surged to a record $442,525 in June, with average 30-year mortgage rates at 6.92%. In addition to the elevated home prices and mortgage rates, potential buyers are also contending with other financial burdens, including insurance, property taxes, and homeowners association (HOA) fees, all intensified by inflation.
This nationwide affordability crisis has caused the largest decrease in home sales in eight months, according to Redfin. Monthly home sales dropped by 0.5% in June, the steepest decline since October 2023. Year-over-year sales saw a 1.1% decrease, remaining 21.5% lower than pre-pandemic figures.