Realtors are encountering a surge of hesitant buyers as the real estate market becomes increasingly challenging.
In June, nearly 56,000 home purchase agreements were canceled, representing 15% of all contracts made that month, according to a report from Redfin released on Tuesday. This marks the highest cancellation percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this trend to buyers being more discerning amid rising costs. She noted that potential homeowners are backing out over minor issues, as the financial implications of buying a home have become significant enough that buyers feel compelled to meet their ideal criteria.
Similarly, Rafael Corrales, a Redfin agent in Miami, has witnessed troubling situations with last-minute cancellations over trivial concerns. In Miami alone, approximately 2,500 home purchases were canceled last month, making up about 17.6% of homes that went under contract in June. Corrales indicated that the primary concern is still affordability.
In June, the median home sale price hit a record high of $442,525, while the average interest rate for a 30-year mortgage reached 6.92%. Coupled with high home prices, elevated mortgage rates, and increased costs from insurance, property taxes, and homeowners association fees, potential buyers are struggling in a market further strained by inflation.
This lack of affordability has led to the most significant decline in home sales in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the largest drop since October 2023. Year-over-year, home sales fell by 1.1% and were down by 21.5% compared to pre-pandemic figures.