Realtors are encountering an increasing number of indecisive buyers as individuals become more selective amidst challenging conditions in the real estate market.
According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that were under contract that month. This marks the highest percentage ever recorded in June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in buyers retracting offers to a more discerning clientele facing elevated market prices.
“They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to justify not meeting all their must-have criteria,” Zubiate explained.
Rafael Corrales, a Redfin agent based in Miami, noted that he has witnessed “nightmare scenarios,” including last-minute cancellations over trivial details. In Miami alone, approximately 2,500 home purchase agreements were canceled last month, which equates to around 17.6% of homes that went under contract in June. Corrales pointed out that the primary hurdle is affordability.
The median home sale price reached a record high of $442,525 in June, alongside an average mortgage rate of 6.92% for 30-year loans. Prospective home buyers are also contending with added financial burdens such as insurance, property taxes, HOA fees, and various homeownership costs, all intensified by inflation.
This lack of affordability across the nation has resulted in the most significant drop in home sales in the last eight months, as reported by Redfin. Month-over-month, home sales fell by 0.5% in June, marking the largest decrease since October 2023. Furthermore, year-over-year home sales declined by 1.1% and were 21.5% below pre-pandemic figures.