Realtors are encountering an increasing number of indecisive buyers as the real estate market remains challenging.
A recent report from Redfin indicates that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest percentage of contract cancellations observed in June to date.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the surge in cancellations to buyers becoming more selective amid rising market costs. “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 noted.
Rafael Corrales, another Redfin agent based in Miami, reported witnessing numerous last-minute cancellations resulting from trivial details. Approximately 2,500 home purchases were canceled in Miami last month, accounting for about 17.6% of homes that were under contract. Corrales pointed out that the critical issue at hand is affordability.
The median home sale price reached a record high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to elevated home prices and mortgage rates, potential buyers are also facing challenges from rising insurance costs, property taxes, HOA fees, and other homeownership expenses that have been intensified by inflation.
The nationwide decline in affordability has led to a notable drop in home sales, which have experienced their most significant decrease in eight months, as per Redfin’s analysis. Monthly home sales dipped by 0.5% in June, marking the largest decline since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.