Realtors are facing an increasing number of indecisive buyers as the challenging real estate market leads to heightened selectivity among potential homeowners.
A recent report from Redfin reveals that nearly 56,000 home-purchase agreements in June were not finalized, accounting for 15% of all homes that went under contract that month. This represents the highest cancellation rate for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes this trend to buyers becoming more discerning in light of a costly market. She noted that many buyers are backing out of agreements over minor issues because the financial implications of purchasing a home today are substantial, making it essential for them to meet their key requirements.
Rafael Corrales, a Redfin agent in Miami, reported similar experiences, describing “nightmare scenarios” where buyers cancel at the last minute over trivial details. In Miami, around 2,500 home purchases were aborted in June, equating to 17.6% of homes that went under contract. Corrales pointed out that the core issue remains affordability.
The median sale price for homes reached a record high of $442,525 in June, with the average interest rate for a 30-year mortgage at 6.92%. Alongside high home prices and elevated mortgage rates, potential buyers are also grappling with various other costs such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
The national affordability crisis has contributed to a significant decline in home sales, with Redfin reporting the biggest drop in eight months. Home sales fell by 0.5% month-over-month in June, marking the steepest decline since October 2023, while year-over-year sales decreased by 1.1%, standing 21.5% lower than pre-pandemic levels.