Realtors are encountering an increasing number of indecisive buyers as individuals become more particular amid a challenging real estate landscape.
A report from Redfin revealed that approximately 56,000 home-purchase agreements were abandoned in June, representing 15% of all contracts that month. This marks the highest percentage recorded for June by the real estate site.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in canceled deals to buyers becoming more selective, struggling with the high costs associated with purchasing a home.
“They’re backing out due to minor issues because the monthly costs related to buying a home today are just too high to justify not getting everything on their must-have list,” Zubiate explained.
Rafael Corrales, another Redfin agent based in Miami, reported witnessing “nightmare scenarios,” including last-minute cancellations over minor details. In Miami alone, around 2,500 home purchases were canceled last month, accounting for about 17.6% of all contracts made in June. Corrales emphasized that the primary concern is affordability.
The median home sale price hit an all-time high of $442,525 in June, while the average rate for a 30-year mortgage was recorded at 6.92%. In addition to the steep home prices and elevated mortgage rates, prospective buyers are also faced with rising insurance costs, property taxes, HOA fees, and various other expenses linked to homeownership, all intensified by inflation.
This widespread lack of affordability has resulted in the most significant drop in home sales nationwide in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the largest decline since October 2022. On a year-over-year basis, home sales fell by 1.1% and were 21.5% below levels seen before the pandemic.