Realtors are experiencing an increase in cautious buyers as the real estate market becomes more challenging. A recent Redfin report revealed that nearly 56,000 home-purchase agreements were terminated in June, equating to 15% of all homes that went under contract that month, marking the highest percentage for June recorded by the site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in buyer hesitance to the high costs associated with purchasing a home. “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.
In Miami, Redfin agent Rafael Corrales reported that he has encountered significant cancellations due to small factors, with approximately 2,500 home purchases canceled in June, representing around 17.6% of homes under contract. Corrales emphasized that the main challenge is affordability.
In June, the median home sale price reached a record $442,525, with the average 30-year mortgage rate at 6.92%. In addition to high home prices and elevated mortgage rates, homebuyers are also facing increased costs from insurance, property taxes, HOA fees, and other related expenses, worsened by inflation.
This lack of affordability has led to a substantial decline in home sales, according to Redfin. Monthly home sales dropped by 0.5% in June, marking the most significant decrease since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.