Realtors are facing an increasing number of hesitant buyers as the real estate market becomes more challenging. According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, which amounts to 15% of all homes that went under contract during that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are becoming more selective due to higher market costs. She mentioned that buyers are withdrawing from deals over minor issues because the monthly expenses linked to purchasing a home have become difficult to justify without getting everything on their wish list.
In Miami, agent Rafael Corrales highlighted “nightmare scenarios” of last-minute cancellations over trivial details. Approximately 2,500 home purchases were canceled in Miami last month, which constitutes about 17.6% of homes that went under contract in June. Corrales noted that the central issue remains affordability.
The median home sale price hit a record high of $442,525 in June, with the average interest rate for a 30-year mortgage at 6.92%. In addition to the elevated home prices and ongoing high mortgage rates, prospective buyers are also burdened by insurance, property taxes, HOA fees, and other costs associated with homeownership that have risen due to inflation.
The nationwide lack of affordability has resulted in a significant decline in home sales, the most substantial drop in eight months, as reported by Redfin. Home sales decreased by 0.5% in June compared to the previous month, marking the largest decline since October 2022. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.