Realtors are encountering an increase in indecisive buyers as the challenging real estate market leads to higher demands from potential homeowners.
In June, nearly 56,000 home-purchase agreements were terminated, representing 15% of all homes that entered contracts that month, according to a Redfin report released on Tuesday. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the surge in buyer cancellations to a more discerning clientele faced with rising market costs. She noted that buyers are often withdrawing from agreements over minor issues, as the financial implications of purchasing a home today are significant enough that they feel compelled to demand every item on their wish list.
Rafael Corrales, a Redfin agent in Miami, described some transactions spiraling into “nightmare scenarios” with last-minute cancellations driven by small details. In Miami alone, around 2,500 home purchases were canceled in June, amounting to approximately 17.6% of homes under contract. He emphasized that the primary challenge in the market is affordability.
June witnessed a record median home sale price of $442,525, alongside an average 30-year mortgage rate of 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are also facing burdens from insurance, property taxes, homeowner association fees, and other costs of homeownership, all of which have been intensified by inflation.
The nationwide issue of affordability has resulted in a significant slowdown in home sales, which have experienced their largest decline in eight months, according to Redfin. On a month-to-month basis, home sales dipped by 0.5% in June, the biggest drop since October 2023. Comparatively, year-over-year home sales fell by 1.1%, remaining 21.5% below levels seen prior to the pandemic.