Realtors are experiencing a significant increase in hesitant buyers, as individuals become more selective in a challenging real estate environment.
According to a report from Redfin published Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers’ scrutiny in the face of a costly market. “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.
Rafael Corrales, another Redfin agent based in Miami, reported seeing “nightmare scenarios” unfold, including last-minute cancellations over trivial details. In Miami, around 2,500 home purchases were canceled last month, equating to about 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern for buyers is affordability.
The median home sale price reached a record high of $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. In addition to the elevated home prices and persistent mortgage rates, potential buyers are further burdened by insurance costs, property taxes, homeowner association fees, and other ownership expenses, all of which have been intensified by inflation.
The nationwide affordability crisis has led to the steepest drop in home sales in eight months, as reported by Redfin. Month-over-month, home sales fell by 0.5% in June, marking the largest decline since October 2023. Year-over-year, there was a 1.1% decrease in home sales, which were also 21.5% lower than pre-pandemic levels.