Realtors are facing an increasing number of buyers who are hesitant to follow through with home purchases, as consumers become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that were under contract during 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, attributed this trend to buyers reassessing their needs amid rising 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 explained.
Rafael Corrales, a Redfin agent in Miami, described “nightmare scenarios” where deals fell through at the last minute due to trivial concerns. In Miami, approximately 2,500 home purchases were canceled in June, equating to about 17.6% of homes under contract. Corrales emphasized that the primary concern is affordability.
The median home sale price reached a record high of $442,525 in June, accompanied by an average mortgage rate of 6.92% for a 30-year loan. In addition, prospective buyers are facing challenges from rising insurance costs, property taxes, HOA fees, and other expenses related to homeownership, all worsened by inflation.
This widespread lack of affordability is impacting home sales across the country, leading to the most significant decline in eight months, as per Redfin’s analysis. On a monthly basis, home sales fell by 0.5% in June, marking the steepest drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.