Realtors are facing an unprecedented wave of indecisive buyers as the current real estate market becomes increasingly challenging.
According to a recent report by Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes under contract that month. This marks the highest percentage on record for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this increase in cancellations to buyers who are more selective, particularly due to rising costs associated with homeownership. “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 noted.
In Miami, Redfin agent Rafael Corrales reported dramatic last-minute cancellations over trivial details, with approximately 2,500 home purchases canceled in June. This figure constitutes around 17.6% of homes under contract in that area. Corrales emphasized that affordability remains the vital concern for buyers.
The median home sale price reached an all-time high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. In addition to expensive home prices and elevated mortgage rates, prospective buyers face increased financial burdens from insurance, property taxes, HOA fees, and other costs linked to homeownership, all further complicated by inflation.
This lack of affordability has contributed to the most significant drop in home sales the nation has seen in eight months. Redfin reported that overall home sales fell by 0.5% in June compared to the previous month, marking the largest decrease since October 2022. Year-over-year, home sales saw a decline of 1.1%, with a staggering 21.5% drop compared to pre-pandemic levels.