Realtors are facing an unprecedented number of indecisive buyers as consumer preferences shift in today’s challenging real estate market.
According to a report by Redfin, approximately 56,000 home purchase agreements fell through in June, which accounts for 15% of all homes that were under contract that month. This marks the highest percentage recorded for any June by the company.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, suggests the uptick in buyers backing out is due to a more discerning clientele who are struggling with higher costs in the 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 remarked.
In Miami, Redfin agent Rafael Corrales has witnessed “nightmare scenarios,” including last-minute cancellations over minor details. Around 2,500 home purchases were canceled in Miami last month, representing roughly 17.6% of homes that went under contract in June. Corrales noted that the main concern for buyers is affordability.
The median home sale price reached a record high of $442,525 in June, with the average fixed mortgage rate at 6.92%. In addition to high home prices and ongoing elevated mortgage rates, potential buyers are also burdened by rising insurance costs, property taxes, HOA fees, and other expenses linked to homeownership that have been worsened by inflation.
The nationwide lack of affordability has led to the most significant decline in home sales in eight months, as reported by Redfin. Monthly home sales decreased by 0.5% in June, marking the largest drop since October 2023. Year-over-year, home sales fell by 1.1%, which is 21.5% below the levels seen before the pandemic.