In a challenging real estate market, realtors are witnessing an unprecedented number of indecisive buyers.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. 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, attributed the surge in buyer hesitation to a more discerning clientele facing heightened market costs. She noted, “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.”
Rafael Corrales, another Redfin agent based in Miami, reported experiencing “nightmare scenarios” with buyers canceling at the last minute over trivial concerns. In Miami alone, about 2,500 home purchases were canceled last month, representing approximately 17.6% of homes that had been under contract in June. Corrales identified affordability as the principal challenge.
The median home sale price soared to a record $442,525 in June, with the average 30-year mortgage rate reaching 6.92%. Coupled with the high prices of homes for sale and elevated mortgage rates, potential homebuyers are further burdened by rising insurance costs, property taxes, HOA fees, and other expenses tied to homeownership, all exacerbated by inflation.
This affordability crisis has led to a significant downturn in home sales nationwide, which experienced their largest monthly decline in eight months, according to Redfin. Home sales decreased by 0.5% in June, marking the steepest drop since October 2023. On a year-over-year basis, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic figures.