Realtors are facing an increasing number of indecisive buyers as the real estate market becomes more challenging.
In a recent report from Redfin, it was revealed that nearly 56,000 home-purchase agreements were abandoned in June, which constitutes 15% of all homes that entered contracts that month. This marks the highest rate of cancellations recorded for a June.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the increase in cancellations to buyers who are becoming more selective as they navigate a market with rising costs. “They are backing out for minor issues because the monthly expenses of buying a home today are too substantial to overlook any unmet requirements,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, reported seeing many difficult situations unfold, including last-minute deal cancellations over trivial details. In Miami alone, approximately 2,500 home purchases were called off last month, equating to about 17.6% of homes that were under contract in June. The primary concern for buyers, according to Corrales, is the issue of affordability.
The median sale price of homes hit a staggering $442,525 in June, while the average interest rate on a 30-year mortgage reached 6.92%. In addition to high property prices and elevated mortgage rates, prospective buyers are also facing increased costs from insurance, property taxes, HOA fees, and other homeowner expenses, all intensified by inflation.
The national affordability crisis has led to the most significant decrease in home sales in eight months, as reported by Redfin. Home sales fell by 0.5% in June, marking the largest decline since October 2023. Year-over-year, home sales decreased by 1.1% and were down 21.5% compared to pre-pandemic levels.