Realtors are facing an unprecedented number of indecisive buyers as the current real estate market becomes increasingly challenging.
According to a report from Redfin published on Tuesday, 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 for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed this trend to a more discerning buyer population that is struggling with higher market costs. “They’re backing out due to minor issues because the monthly expenses tied to home buying today are simply too high to justify not getting everything on their must-have list,” Zubiate explained.
In Miami, Redfin agent Rafael Corrales reported “nightmare scenarios” with last-minute cancellations driven by small details. Approximately 2,500 home purchases in Miami were canceled in June, representing about 17.6% of all homes that went under contract. 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 reached 6.92%. Prospective buyers are also facing rising costs related to insurance, property taxes, homeowners association fees, and other expenses, all made worse by inflation.
This widespread lack of affordability has led to the most significant decline in home sales in eight months, according to Redfin. Month-over-month, home sales fell by 0.5% in June, a notable drop since October 2023. Year-over-year, there was a 1.1% decrease in sales, with numbers 21.5% lower than pre-pandemic levels.