Realtors are experiencing an unprecedented number of indecisive buyers as the real estate market remains challenging.
According to a report from Redfin, nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that went under contract during that month. This represents the highest percentage of canceled agreements recorded for June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in buyer hesitance to a more discerning clientele facing a costly market. She noted that buyers are backing out due to minor issues, as the financial burden of homeownership has risen to a level that makes them less willing to compromise on their must-have features.
In Miami, Redfin agent Rafael Corrales reported troubling trends, including last-minute cancellations over trivial matters, with approximately 2,500 home purchases canceled in June, translating to about 17.6% of homes that went under contract. Corrales pointed out that the core issue remains the lack of affordability.
The median home sale price hit a record high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the escalating home prices and high mortgage rates, potential buyers are burdened by increased costs related to insurance, property taxes, homeowners association fees, and other expenses tied to homeownership, all worsened by inflation.
This lack of affordability on a national scale has led to a significant drop in home sales, marking the largest decline in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June — the steepest fall since October 2022. Year-over-year comparisons show a 1.1% decline in sales, which also reflects a 21.5% drop compared to pre-pandemic levels.