Realtors are facing an increasing number of fickle buyers as individuals become more selective in the challenging real estate landscape.
In June, nearly 56,000 agreements for home purchases fell through, representing 15% of all homes that went under contract during that month, according to a recent report from Redfin. This marks the highest percentage ever recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the surge in deals collapsing to buyers who are navigating a costly market. “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 explained.
Rafael Corrales, another agent from Redfin in Miami, described “nightmare scenarios” of last-minute cancellations stemming from trivial details. Approximately 2,500 home purchases were canceled in Miami last month, accounting for around 17.6% of homes under contract in June. Corrales emphasized that the core issue remains affordability.
In June, the median home sale price soared to a record $442,525, while the average 30-year mortgage rate stood at 6.92%. Alongside the elevated home prices and persistent mortgage rates, potential buyers are also burdened by insurance, property taxes, homeowners association fees, and other ownership costs, all of which have been amplified by inflation.
This nationwide decline in affordability has led to the most significant drop in home sales in eight months, according to Redfin. Month-over-month, home sales fell by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, the decline was recorded at 1.1%, placing sales 21.5% below pre-pandemic levels.