Realtors are encountering an increasing number of indecisive buyers as people become more selective in a challenging real estate market.
In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all contracts for that month, marking the highest percentage for June recorded by Redfin.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are experiencing hesitance amid rising costs. She noted, “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.”
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios” with last-minute cancellations over small issues. Approximately 2,500 home purchases were called off in Miami in June, which equates to about 17.6% of homes that were under contract. Corrales emphasized that affordability remains the primary concern for buyers.
The median home sale price hit a record $442,525 in June, with the average 30-year mortgage rate at 6.92%. In addition to high property prices and elevated mortgage rates, potential buyers are also facing burdens from insurance, property taxes, HOA fees, and other ownership-related costs, all exacerbated by inflation.
The national affordability crisis is leading to the biggest decline in home sales in the past eight months, as reported by Redfin. Month-over-month, sales dropped by 0.5% in June, the steepest decline since October 2023. Year-over-year, home sales decreased by 1.1% and remained 21.5% below levels observed before the pandemic.