Realtors are facing a rise in hesitant buyers in the current challenging real estate market, with many prospective homeowners becoming increasingly selective.
According to a report from Redfin released on Tuesday, approximately 56,000 home purchase agreements were terminated in June, equating to 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 increase in buyer cancellations to the high costs of homeownership. She noted that buyers are opting out for relatively minor issues since the monthly expenses associated with purchasing a home are considerably high.
Rafael Corrales, a Redfin agent in Miami, described witnessing “nightmare scenarios,” including last-minute cancellations over small details. In June, about 2,500 home purchases were canceled in Miami, representing around 17.6% of homes under contract that month. He pointed out that the main concern driving these backouts is affordability.
The median home sale price hit a record high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to expensive home prices and high mortgage rates, potential homebuyers are also contending with increased homeowner insurance, property taxes, HOA fees, and other costs that have been worsened by inflation.
The nationwide affordability crisis has contributed to a significant decline in home sales, with Redfin indicating the largest dip in eight months. Monthly home sales fell by 0.5% in June, marking the most substantial drop since October 2023. Comparatively, year-over-year home sales decreased by 1.1% and were 21.5% below pre-pandemic levels.