Realtors are facing an unprecedented number of indecisive buyers as they become increasingly selective in a challenging real estate market.
According to a report from Redfin published Tuesday, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes under contract that month. This marks the highest rate recorded for any June by the real estate firm.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to buyers who are navigating a more expensive market and are unwilling to compromise on their preferences. “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 stated.
Rafael Corrales, a Redfin agent in Miami, reported witnessing “nightmare scenarios” as buyers cancel deals at the last minute over small details. In Miami alone, approximately 2,500 home purchases were called off last month, equating to about 17.6% of homes that went under contract in June. Corrales emphasized that affordability remains the primary concern for buyers.
The median home sale price reached a record high of $442,525 in June, paired with an average 30-year mortgage rate of 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are also facing increased burdens from insurance, property taxes, homeowners’ association fees, and other costs associated with homeownership, all intensified by ongoing inflation.
This widespread lack of affordability in the market has led to the most significant decline in home sales in eight months. According to Redfin, home sales fell by 0.5% in June compared to the previous month, marking the steepest drop since October 2023. Year-over-year home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.