Realtors are encountering an increasing number of hesitant buyers as consumers become more discerning in a challenging real estate environment.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage of cancellations ever recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes this surge in buyer withdrawal to a more selective clientele facing a costly market. She noted that buyers are reconsidering purchases over minor issues, as the monthly costs associated with homebuying have risen to a level that makes them unwilling to compromise on their wish lists.
Rafael Corrales, a Redfin agent operating in Miami, commented on the “nightmare scenarios” he has witnessed, including last-minute cancellations due to trivial details. Approximately 2,500 home purchases were suspended in Miami last month, equating to about 17.6% of homes that went under contract in June. He pointed out that the most pressing concern for buyers is affordability.
The median home sale price reached a historic high of $442,525 in June, with the average rate for a 30-year mortgage sitting at 6.92%. In addition to the steep home prices and persistent high mortgage rates, potential buyers are facing added burdens such as insurance, property taxes, homeowners association fees, and other ownership-related expenses, all of which have been exacerbated by inflation.
This affordability crisis has contributed to the most significant decline in home sales in eight months, according to Redfin. Sales dipped by 0.5% in June compared to the previous month—the largest drop since October 2022. Year-over-year, home sales fell by 1.1% and were down 21.5% from pre-pandemic levels.