Realtors are facing an unprecedented number of indecisive buyers as individuals 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 had gone under contract that month, according to a Redfin report released on Tuesday. This marks the highest percentage for any June recorded by the real estate company.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributed the surge in cancellations to buyers who are now more particular due to the 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 explained.
In Miami, fellow Redfin agent Rafael Corrales reported experiencing “nightmare scenarios,” including last-minute cancellations over small concerns. Approximately 2,500 home purchases were canceled in Miami last month, equating to about 17.6% of homes that were under contract in June. Corrales noted that the primary issue is affordability.
In June, the median home sale price reached a record high of $442,525, while the average rate for a 30-year mortgage was at 6.92%. Prospective home buyers are also facing challenges from insurance, property taxes, HOA fees, and other associated costs of homeownership, all of which have been intensified by inflation.
Nationwide affordability issues have led to a significant decline in home sales, marking the steepest drop in eight months, according to Redfin. On a monthly basis, home sales decreased by 0.5% in June, the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were down 21.5% compared to pre-pandemic levels.