Realtors are facing an increasing number of indecisive buyers in the current challenging real estate market.
A Redfin report released on Tuesday revealed that nearly 56,000 home-purchase agreements were canceled in June, equating to 15% of all homes that entered contracts that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to a more selective buyer base contending with 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 explained.
In Miami, Redfin agent Rafael Corrales reported “nightmare scenarios” where buyers backed out last minute over trivial details. Approximately 2,500 home purchases in Miami were canceled last month, representing about 17.6% of homes that went under contract in June. Corrales highlighted that the primary challenge remains affordability.
The median sale price for homes hit a record high of $442,525 in June, with average 30-year mortgage rates at 6.92%. In addition to the high prices, potential homebuyers are also grappling with increased costs for insurance, property taxes, and homeowners association fees, all aggravated by inflation.
The widespread lack of affordability has led to the most significant decrease in home sales in eight months, according to Redfin. Monthly sales fell by 0.5% in June, the largest drop since October 2023. On a yearly basis, home sales declined by 1.1% and were 21.5% below pre-pandemic levels.