Realtors are experiencing a surge in indecisive buyers, as individuals become more selective in a challenging real estate market.
In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that were contracted during that month, according to a report from Redfin. This marks the highest percentage of cancellations recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the spike in buyer hesitancy to a more discerning clientele faced with escalating market costs. “Buyers are withdrawing over minor issues because the monthly expenses associated with purchasing a home today are simply too high to overlook any shortcomings on their must-have list,” Zubiate explained.
Rafael Corrales, another Redfin agent based in Miami, reported encountering “nightmare scenarios,” including last-minute pullouts due to minor details. Last month, approximately 2,500 home purchases were canceled in Miami, which equates to about 17.6% of homes that were under contract in June. Corrales noted that the primary issue at hand is affordability.
The median home sale price reached a historic high of $442,525 in June, accompanied by an average 30-year mortgage rate of 6.92%. In addition to high home prices and still-elevated mortgage rates, potential homebuyers are also burdened by insurance, property taxes, homeowners association fees, and various other costs tied to homeownership, which have been intensified by inflation.
Nationwide affordability challenges have led to the most significant drop in home sales in eight months, as reported by Redfin. On a month-to-month basis, home sales decreased by 0.5% in June, representing the steepest decline since October 2022. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.