Realtors are currently facing an unprecedented number of indecisive buyers as consumers become increasingly selective in a challenging real estate market.
In June, nearly 56,000 home purchase agreements were canceled, representing 15% of all homes that entered contract that month, as reported by Redfin. This marks the highest percentage of cancellations recorded for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the surge in buyer hesitation to individuals confronting rising costs in the housing market. “They’re backing out due to minor issues because the monthly costs associated with buying a home today are just too high to rationalize not getting everything on their must-have list,” Zubiate noted.
Rafael Corrales, another Redfin agent based in Miami, described “nightmare scenarios” where last-minute withdrawals occur over trivial details. Approximately 2,500 home purchases were canceled in Miami last month, which is about 17.6% of homes that were under contract in June. Corrales emphasized that the primary concern remains affordability.
The median home sale price hit a record high of $442,525 in June, with the average interest rate for a 30-year mortgage at 6.92%. In addition to high home prices and ongoing elevated mortgage rates, prospective buyers are burdened by rising insurance costs, property taxes, HOA fees, and other expenses associated with homeownership, all intensified by inflation.
This widespread lack of affordability has led to the most significant decrease in home sales in eight months, per Redfin’s analysis. Month-over-month, home sales fell by 0.5% in June, marking the largest drop since October 2023. Year-over-year, there was a 1.1% decline in home sales, with figures 21.5% lower than pre-pandemic levels.