Realtors are experiencing an unprecedented number of hesitant buyers as individuals become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation rate for June recorded by the real estate platform.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributes the increase in cancellations to buyers being more discerning in an expensive housing market. She noted, “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to justify not getting everything on their must-have list.”
Rafael Corrales, another Redfin agent based in Miami, shared that he has witnessed alarming cases of last-minute cancellations over trivial matters. In Miami alone, approximately 2,500 home purchases were canceled last month, accounting for about 17.6% of homes that went under contract in June. Corrales highlighted that the primary concern remains the issue of affordability.
The median home sale price reached a record high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to expensive home prices and elevated mortgage rates, potential home buyers are facing burdens from insurance, property taxes, HOA fees, and other costs associated with homeownership, all of which have been aggravated by inflation.
This widespread lack of affordability has led to the most significant drop in home sales seen in eight months. According to Redfin, home sales decreased by 0.5% in June compared to the previous month, marking the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% below levels seen prior to the pandemic.