Realtors are encountering an increasing number of hesitant buyers as individuals become more discerning in a challenging real estate landscape.
A recent report from Redfin indicates that almost 56,000 home-purchase agreements were abandoned in June, representing 15% of all homes that entered contracts that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are more selective and struggling with heightened housing costs. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” Zubiate remarked.
Rafael Corrales, another Redfin agent based in Miami, noted that he has witnessed distressing situations, including last-minute cancellations for trivial details. Approximately 2,500 home purchases in Miami were canceled last month, making up about 17.6% of homes that were under contract in June. He emphasized that the primary concern remains affordability.
The median home sale price soared to a record $442,525 in June, while the average 30-year mortgage rate rose to 6.92%. Compounded by the high cost of homes and elevated mortgage rates, prospective buyers also face growing burdens from insurance, property taxes, Homeowners Association (HOA) fees, and other homeownership-related costs heightened by inflation.
This nationwide lack of affordability has led to a notable decline in home sales, marking the most significant drop in eight months, according to Redfin. Month-over-month, home sales saw a decrease of 0.5% in June, the largest decline since October 2023. Year-over-year, sales dropped by 1.1% and were 21.5% below pre-pandemic levels.