Realtors are experiencing a surge in hesitant buyers as individuals become more selective in a challenging real estate landscape.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract for the month. 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 this increase in buyer indecision to a more discerning clientele facing elevated 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.
Rafael Corrales, a Redfin agent in Miami, has witnessed “nightmare scenarios” unfold, including last-minute cancellations over minor details. Last month, approximately 2,500 home purchases in Miami were canceled, accounting for about 17.6% of homes that went under contract. However, Corrales noted that the underlying concern remains affordability.
The median home sale price hit a record $442,525 in June, with the average 30-year mortgage rate at 6.92%. In addition to high home prices and mortgage rates, prospective buyers are facing mounting expenses from insurance, property taxes, homeowners association fees, and other costs of homeownership that have been intensified by inflation.
This lack of affordability across the nation has led to the sharpest drop in home sales in eight months, as reported by Redfin. Monthly home sales experienced a 0.5% decline in June, marking the largest decrease since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.