Realtors are encountering an increasing number of hesitant buyers, as potential homeowners become more selective in a challenging real estate market.
According to a recent report from Redfin, approximately 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June since Redfin began tracking these statistics.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in withdrawal rates to buyers who are now more discerning, particularly in light of soaring market prices. She noted, “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.”
Similarly, Rafael Corrales, a Redfin agent in Miami, reported witnessing “nightmare scenarios” involving last-minute cancellations over trivial details. Last month, about 2,500 home purchases were canceled in Miami, accounting for roughly 17.6% of homes that went under contract in June. Corrales emphasized that the core issue is affordability.
The median home sale price in June reached a record high of $442,525, while the average rate for a 30-year mortgage stood at 6.92%. In addition to elevated home prices and persistent mortgage rates, prospective buyers are also facing challenges from insurance costs, property taxes, HOA fees, and all other expenses linked to homeownership, which have all been worsened by inflation.
This overall lack of affordability nationwide has led to the most significant decline in home sales in eight months, as reported by Redfin. Month-over-month, home sales dropped by 0.5% in June, marking the largest decline since October 2023. Comparatively, year-over-year home sales fell by 1.1%, and they are currently 21.5% lower than pre-pandemic levels.