Realtors are facing an unprecedented number of tentative buyers as individuals become increasingly selective in a challenging real estate environment. According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that entered contracts that month. This marks the highest cancellation rate for June recorded by the real estate platform.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributes the surge in buyers withdrawing from deals to the heightened expectations of buyers confronting a pricey market. 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.”
Rafael Corrales, another Redfin agent based in Miami, described seeing extreme instances of cancellations over trivial matters. He reported that approximately 2,500 home purchases were called off in Miami last month, equating to about 17.6% of homes that were under contract in June. Corrales emphasized that the overarching issue is affordability.
June marked a record median home sale price of $442,525, while the average rate for a 30-year mortgage reached 6.92%. In addition to high property prices and mortgage rates, potential homebuyers are increasingly burdened by other costs, including insurance, property taxes, and homeowners association fees, all of which have been exacerbated by inflation.
The national affordability crisis has led to a significant decline in home sales, the most considerable drop in eight months, according to Redfin. Sales fell by 0.5% month-over-month in June, the largest decrease since October 2023. Compared to the previous year, home sales decreased by 1.1% and were down 21.5% from pre-pandemic levels.