Realtors are encountering an increasing number of indecisive buyers amid a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were terminated in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate company.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the trend of buyers backing out to their heightened selectiveness, driven by the costly nature of purchasing a home today. She noted that many buyers are abandoning deals due to minor issues because the high monthly costs make it unreasonable not to meet their must-have criteria.
Rafael Corrales, another Redfin agent in Miami, reported witnessing challenging scenarios, including last-minute cancellations over trivial matters. In Miami, approximately 2,500 home purchases were canceled in June, representing about 17.6% of homes that went under contract. However, Corrales emphasized that the primary concern for buyers remains affordability.
The median home sale price hit an all-time high of $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. Alongside elevated home prices and persistently high mortgage rates, prospective buyers are facing additional burdens from insurance, property taxes, HOA fees, and other homeownership costs that have worsened due to inflation.
This lack of affordability is impacting the real estate market across the U.S., leading to the largest decrease in home sales in eight months, as reported by Redfin. Home sales fell by 0.5% in June from the previous month, representing the steepest drop since October 2023. Compared to the same time last year, home sales saw a decline of 1.1% and were 21.5% lower than pre-pandemic levels.