Realtors are facing an increasing number of buyers who are hesitant to proceed with home purchases, as many become more selective in the challenging real estate market.
According to a Redfin report released on Tuesday, nearly 56,000 home purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage recorded for any June by the real estate company.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the rise in buyer cancellations to a more discerning clientele facing higher market prices.
She explained, “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 in Miami, described various challenging situations, noting last-minute cancellations over minor details. In June, about 2,500 home purchases were canceled in Miami, translating to roughly 17.6% of homes that had gone under contract. However, he emphasized that the core issue remains affordability.
The median sale price of homes reached a record $442,525 in June, while the average 30-year mortgage rate was pegged at 6.92%. Along with the elevated home prices and still high mortgage rates, prospective buyers are also confronted with additional costs such as insurance, property taxes, HOA fees, and other expenses tied to homeownership, all of which have been impacted by inflation.
The challenges of affordability have led to a significant drop in home sales nationwide, marking the largest decline in eight months, according to Redfin’s findings. Monthly home sales decreased by 0.5% in June, the steepest drop since October 2023. Year over year, home sales fell by 1.1%, and they remain 21.5% lower than pre-pandemic levels.