Realtors are facing an unprecedented number of hesitant buyers as the challenging real estate market leads to increased selectivity among home purchasers.
According to a report from Redfin released Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, noted that the surge in buyer withdrawals is due to prospective homeowners being more discerning in light of rising costs. “They are backing out over minor issues because the monthly expenses associated with buying a home today are simply too high to dismiss not getting everything on their must-have list,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, shared that he has witnessed “nightmare scenarios,” with last-minute cancellations over trivial matters. Approximately 2,500 home purchases were aborted in Miami last month, accounting for 17.6% of homes that went under contract in June. Corrales identified affordability as the primary concern for buyers.
The median home sale price reached an all-time high of $442,525 in June, while the average interest rate for a 30-year mortgage stood at 6.92%. In addition to steep home prices and elevated mortgage rates, potential buyers are also burdened by costs related to insurance, property taxes, homeowners association fees, and other homeownership expenses that have been intensified by inflation.
The growing lack of affordability nationwide has led to the most significant decline in home sales in eight months, as reported by Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the largest drop since October 2023. Compared to the previous year, home sales saw a 1.1% reduction and were 21.5% lower than pre-pandemic figures.