Realtors are facing an increasing number of buyers who are hesitant to move forward, as potential homeowners become more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract during that month. This marks the highest percentage of failed agreements recorded by the real estate website for any June.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes this rise in last-minute cancellations to buyers who are more discerning amid steep market prices. “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.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios,” including last-minute cancellations over small details. Approximately 2,500 home purchases were canceled in Miami in June, amounting to about 17.6% of homes that went under contract. Corrales pointed out that the main concern for buyers remains affordability.
In June, the median home sale price reached an all-time high of $442,525, with the average rate on a 30-year mortgage hitting 6.92%. Along with the elevated home prices and consistently high mortgage rates, prospective buyers are also contending with increased costs related to insurance, property taxes, homeowners association fees, and other expenses tied to homeownership that have been intensified by inflation.
The widespread lack of affordability has resulted in a notable decline in home sales across the nation, with Redfin reporting that June experienced its largest drop in eight months. Monthly sales decreased by 0.5%, marking the steepest decline since October 2023. Year-over-year, home sales fell 1.1% and are 21.5% below pre-pandemic levels.