Realtors are currently facing an unprecedented number of indecisive buyers as the real estate market continues to present challenges. A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract during that month. This marks the highest percentage of cancellations recorded for June by the company.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to more discerning buyers, who are struggling with the high costs associated with homeownership. She noted that potential buyers are retreating over minor issues, as the total monthly expenses of purchasing a home are substantial, making them less willing to compromise on their lists of desired features.
In Miami, Redfin agent Rafael Corrales reported witnessing troubling trends, including last-minute cancellations over trivial details. Last month, approximately 2,500 home purchases were called off in Miami, accounting for about 17.6% of homes that entered into contracts. Corrales emphasized that the primary obstacle for buyers remains affordability.
The median home sale price hit a record high of $442,525 in June, while the average interest rate for a 30-year mortgage stood at 6.92%. Alongside the elevated home prices and mortgage rates, potential buyers are also grappling with additional costs such as insurance, property taxes, and homeowners’ association fees—factors that have been intensified by inflation.
The ongoing affordability crisis in the housing market has led to a significant decline in home sales, marking the largest drop seen in eight months, according to Redfin. Month-over-month, home sales saw a 0.5% decrease in June, which is the most significant decline since October 2023. Compared to the same period last year, home sales fell 1.1% and are currently 21.5% below levels seen before the pandemic.