Realtors are encountering an unprecedented number of hesitant buyers, as individuals grow more selective in today’s challenging real estate market.
According to a report from Redfin published on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes under contract that month. This marks the highest percentage 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 increase in cancellations to a more discerning buyer pool struggling with 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, shared that he has witnessed concerning last-minute cancellations due to trivial details, noting that approximately 2,500 home purchases were called off in Miami last month, which equates to about 17.6% of homes that went under contract in June. However, Corrales emphasized that the primary issue remains affordability.
In June, the median home sale price reached a record $442,525, while the average rate for a 30-year mortgage was 6.92%. In addition to the elevated home prices and high mortgage rates, potential buyers are also facing burdens from insurance, property taxes, HOA fees, and associated costs of homeownership, all exacerbated by inflation.
This lack of affordability has led to the largest decline in home sales nationwide in the past eight months, as reported by Redfin. Home sales saw a 0.5% drop in June compared to the previous month, marking the most significant decrease since October 2023. Year-over-year, home sales declined by 1.1%, standing 21.5% below pre-pandemic levels.