Realtors are facing an unprecedented number of hesitant buyers as consumers become more selective amid challenging real estate conditions.
According to a recent Redfin report, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month, marking the highest rate recorded for June.
Julie Zubiate, a premier real estate agent with Redfin in the San Francisco Bay Area, attributes this rise in cancellations to buyers being more discerning in a costly market. She noted that buyers are withdrawing from contracts over minor issues since the overall expenses of homeownership have risen significantly.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios” where last-minute cancellations occurred due to trivial details. Last month, approximately 2,500 home purchases in Miami were canceled, equating to around 17.6% of homes that were under contract. Corrales emphasized that the primary concern for buyers is affordability.
The median home sale price reached an all-time high of $442,525 in June, while the average rate for a 30-year mortgage was 6.92%. In addition to high home prices and mortgage rates, buyers are also burdened by rising insurance costs, property taxes, HOA fees, and other expenses associated with homeownership, all worsened by inflation.
This struggle for affordability has led to the most significant decline in home sales nationwide in eight months. Redfin reported a 0.5% decrease in home sales in June compared to the previous month, representing the largest drop since October 2023. On a year-over-year basis, home sales fell 1.1% and were 21.5% lower than pre-pandemic figures.