Realtors are facing an unprecedented number of hesitant buyers as individuals become more selective in a challenging real estate market.
According to a report by Redfin released on Tuesday, nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that were under contract that month. This marks the highest cancellation rate recorded by the real estate platform for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this increase in buyer hesitance to a more discerning clientele grappling with elevated market costs.
“They are backing out due to minor issues because the monthly expenses tied to purchasing a home today are simply too high to justify not getting everything on their must-have list,” Zubiate stated.
Rafael Corrales, a Redfin agent in Miami, described witnessing “nightmare scenarios,” including last-minute dropouts over trivial details. Approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of homes that had gone under contract. Corrales emphasized that the primary concern among buyers is affordability.
In June, the median home sale price hit a record high of $442,525, while the average 30-year mortgage rate was recorded at 6.92%. Alongside the elevated home prices and persistent mortgage rates, potential buyers are also facing added financial burdens from insurance, property taxes, HOA fees, and other costs associated with homeownership that have been intensified by inflation.
This widespread lack of affordability has resulted in the most significant decline in nationwide home sales in eight months, as per Redfin. On a monthly scale, home sales decreased by 0.5% in June, marking the largest drop since October 2023. Year-over-year, home sales fell by 1.1% and remain 21.5% below pre-pandemic levels.