Realtors are facing an increasing number of hesitant buyers as individuals become more selective in a challenging real estate market.
According to a recent Redfin report, 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 cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers being more particular amidst escalating market prices. 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 rationalize not getting everything on their must-have list.”
Rafael Corrales, a Redfin agent based in Miami, highlighted troubling trends, including last-minute cancellations over insignificant details. In June alone, around 2,500 home purchases were called off in Miami, accounting for approximately 17.6% of homes that went under contract. Corrales pointed out that the primary concern for these buyers is affordability.
The median home sale price reached an unprecedented $442,525 in June, with the average interest rate for a 30-year mortgage soaring to 6.92%. In addition to high home prices and elevated mortgage rates, potential homebuyers are also hindered by insurance, property taxes, HOA fees, and other ownership-related expenses that have been worsened by inflation.
The national lack of affordability has led to the most significant drop in home sales in eight months, as reported by Redfin. Sales fell by 0.5% month-over-month in June, marking the steepest decline since October 2023. Moreover, from the same period last year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.