Realtors are encountering an unprecedented number of indecisive buyers as individuals become choosier in a challenging real estate landscape.
In June, nearly 56,000 home-purchase agreements fell through, representing 15% of all homes under contract that month, according to a recent report from Redfin. This marks the highest percentage of canceled contracts for the month of June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in buyer hesitancy to individuals’ demands amid a costly market. “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 witnessing “nightmare scenarios” where buyers cancel at the last minute due to trivial concerns. In June, about 2,500 home purchases were called off in Miami, accounting for approximately 17.6% of homes that were under contract. Corrales noted that affordability remains the primary concern for many buyers.
The median sale price for homes hit a record high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to the elevated prices of homes, potential buyers are also facing challenges from insurance costs, property taxes, homeowners association fees, and other expenses linked to homeownership that are being inflated by broader economic conditions.
Nationwide affordability issues have led to a significant decline in home sales, which saw their largest decrease in eight months, according to Redfin. Month-over-month sales fell by 0.5% in June, marking the steepest drop since October 2023. Year-over-year, home sales declined by 1.1%, and they are currently 21.5% below pre-pandemic levels.