Realtors are witnessing an unprecedented number of indecisive buyers as individuals become more selective in a challenging real estate market.
A recent report from Redfin indicates that nearly 56,000 home purchase agreements were terminated in June, representing 15% of all homes that went under contract that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the increase in last-minute cancellations to buyers who are now more discerning amid rising costs.
“Buyers are withdrawing over minor issues because the monthly expenses tied to purchasing a home today are prohibitively high, making it essential for them to meet their complete list of requirements,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, shared experiences of what he describes as “nightmare scenarios,” with last-minute drops over trivial details. In Miami alone, about 2,500 home purchases were called off last month, accounting for approximately 17.6% of the homes that went under contract in June. However, Corrales emphasized that the overarching problem is affordability.
In June, the median home sale price reached an all-time high of $442,525, with the average rate for a 30-year mortgage at 6.92%. In addition to the steep prices of homes and sustained high mortgage rates, prospective buyers are also facing difficulties from increased costs related to insurance, property taxes, HOA fees, and other homeownership expenses, all exacerbated by inflation.
The significant lack of affordability has contributed to the largest drop in home sales in the past eight months, as reported by Redfin. Monthly home sales fell by 0.5% in June, marking the most significant decrease since October 2023. Year-over-year, home sales declined by 1.1%, standing 21.5% below levels seen before the pandemic.