Realtors are facing an unprecedented number of indecisive buyers as individuals become more selective in a challenging real estate environment.
According to a report from Redfin, nearly 56,000 home purchase agreements were abandoned in June, which accounts for 15% of all homes that entered into contract that month. This marks the highest percentage for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier agent operating in the San Francisco Bay Area, attributed the increase in buyer hesitation to a more discerning clientele struggling with rising costs. She noted, “They’re backing out due to minor issues because the monthly costs linked to buying a home today are simply too high to justify not securing all the items on their must-have list.”
Rafael Corrales, another Redfin agent based in Miami, expressed concern over what he described as “nightmare scenarios,” citing last-minute cancellations driven by trivial details. In June, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of homes that went under contract. Corrales highlighted that the primary issue remains affordability.
June saw the median home sale price soar to a record high of $442,525, while the average interest rate on a 30-year mortgage climbed to 6.92%. In addition to high property prices and elevated mortgage rates, potential buyers are also burdened by rising insurance costs, property taxes, homeowners association (HOA) fees, and other expenses associated with homeownership, all exacerbated by inflation.
The nationwide affordability crisis has led to the most significant decline in home sales in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the largest fall since October 2023. Year-over-year, home sales also dipped by 1.1% and were 21.5% lower than pre-pandemic levels.