Realtors are experiencing a surge in indecisive buyers as individuals become more selective in a challenging real estate market.
According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, equating to 15% of all homes that went under contract during that month. This marks the highest percentage recorded in any June on the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are becoming more discerning amid rising costs. She noted that buyers are backing out due to minor issues, as the monthly expenses tied to purchasing a home are too significant for them to overlook their must-have features.
In Miami, Redfin agent Rafael Corrales reported “nightmare scenarios” where last-minute cancellations occur over trivial details. Last month, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of homes that went under contract. However, Corrales emphasized that the primary concern remains 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%. Coupled with the high prices of homes, potential buyers are also encumbered by rising insurance, property taxes, homeowners association fees, and other costs of homeownership, all of which have been worsened by inflation.
The overall lack of affordability has resulted in a significant decline in home sales nationwide, reflecting the largest drop in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, the most considerable decline since October 2023. Year-over-year sales also fell by 1.1% and were 21.5% lower than pre-pandemic levels.