Realtors are facing an influx of indecisive buyers as the challenging real estate landscape leads to increased scrutiny among potential homeowners.
A recent report from Redfin reveals that nearly 56,000 home-purchase agreements were abandoned in June, representing 15% of all homes that went under contract during that month. This marks the highest cancellation rate recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed this trend to buyers becoming more selective in a market where costs continue to rise. “They’re backing out over minor issues because the monthly expenses tied to purchasing a home today are just too high to overlook on their must-have list,” Zubiate noted.
Rafael Corrales, another Redfin agent based in Miami, reported witnessing “nightmare scenarios,” including last-minute cancellations due to trivial concerns. In Miami alone, around 2,500 home purchases were canceled last month, amounting to about 17.6% of homes that entered contract in June. Corrales emphasized that the primary obstacle is affordability.
With the median home sale price hitting a record high of $442,525 in June, and the average interest rate on a 30-year mortgage at 6.92%, potential buyers are grappling with a multitude of financial burdens. These include insurance, property taxes, HOA fees, and other costs associated with homeownership, all of which have been intensified by inflation.
The widespread lack of affordability is reflected in a significant decline in home sales nationwide, with Redfin reporting the largest drop in eight months. Home sales fell by 0.5% from the previous month in June, the steepest decline since October 2023. On a year-over-year basis, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.