Realtors are facing a surge of indecisive buyers as consumers become more selective in a challenging real estate market.
A recent report from Redfin indicates that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest cancellation rate recorded for the month of June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to buyers being more particular due to rising costs. “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 explained.
Rafael Corrales, a Redfin agent in Miami, has witnessed “nightmare scenarios” where small details have led to last-minute cancellations. In Miami alone, approximately 2,500 home purchases were canceled in June, equating to about 17.6% of homes that went under contract. Corrales emphasized that the main issue is affordability.
June saw the median home sale price reach a record $442,525, with the average rate on a 30-year mortgage at 6.92%. Besides the high property prices and mortgage rates, potential buyers are also facing increased costs related to insurance, property taxes, homeowners association fees, and various other expenses, all worsened by inflation.
The decline in affordability nationwide has contributed to a significant slowdown in home sales, marking the largest drop in eight months, according to Redfin. Month over month, home sales decreased by 0.5% in June, the most considerable decrease since October 2023. Year over year, home sales fell by 1.1% and were 21.5% below levels prior to the pandemic.