Realtors are facing an unprecedented number of indecisive buyers as individuals become more selective in a challenging real estate environment.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This is the highest percentage recorded for 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 a more discerning buyer demographic that is struggling with the high costs associated with purchasing a home.
“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, another agent from Redfin based in Miami, reported witnessing “nightmare scenarios” including last-minute cancellations over trivial matters. He noted that approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of homes that went under contract in June. However, Corrales emphasized that the primary challenge is affordability.
The median home sale price surged to a record $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the high prices, potential homebuyers are facing mounting costs related to insurance, property taxes, HOA fees, and other expenses tied to homeownership, all of which have been worsened by inflation.
The nationwide lack of affordability in the housing market has led to the most significant drop in home sales in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the biggest decline since October 2023. Year-over-year, sales dropped by 1.1% and were 21.5% lower than pre-pandemic figures.