Realtors are encountering an increasing number of indecisive buyers as the real estate market becomes more challenging.
According to a report from Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest percentage of cancellations recorded for any June.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributed the uptick in cancellations to buyers becoming more selective in light of high market prices. She noted that many are withdrawing due to minor issues because the ongoing expenses related to home buying have become difficult to justify without meeting all their criteria.
In Miami, Redfin agent Rafael Corrales reported witnessing “nightmare scenarios,” including last-minute dropouts over trivial details. Approximately 2,500 home purchases were scrapped in Miami last month, accounting for about 17.6% of homes under contract in June. Corrales stated that the primary concern remains affordability.
The median home sale price hit a record high of $442,525 in June, while the average 30-year mortgage rate stood at 6.92%. To make matters worse, potential home buyers are facing rising costs in insurance, property taxes, homeowner association fees, and other expenses related to homeownership, all exacerbated by inflation.
This lack of affordability has led to a notable decrease in home sales nationally, with Redfin reporting the most significant decline in eight months. Home sales fell by 0.5% in June compared to the previous month, marking the largest decrease since October 2023. Year-over-year, home sales decreased by 1.1% and were down 21.5% from pre-pandemic levels.