Realtors are encountering a growing number of indecisive buyers as customers become more selective amid a challenging real estate landscape.
According to a Redfin report released recently, nearly 56,000 agreements for home purchases were abandoned in June, representing 15% of all homes that were under contract that month. This marks the highest percentage for June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increasing cancellations to buyers who are feeling the strain of a more expensive market.
“They are backing out due to minor issues because the monthly costs associated with buying a home today are just too high to overlook not getting everything on their must-have list,” Zubiate stated.
Rafael Corrales, a Redfin agent in Miami, noted that he has witnessed “nightmare scenarios,” including last-minute cancellations triggered by small details. Approximately 2,500 home sales were canceled in Miami last month, equating to about 17.6% of homes that went under contract in June. However, Corrales highlighted that the predominant challenge is affordability.
The median sale price of homes reached a historic high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. Alongside the elevated home prices and persistently high mortgage rates, potential buyers are also facing additional financial burdens from insurance, property taxes, HOA fees, and other costs related to homeownership, all of which have been intensified by inflation.
The overall lack of affordability in the national market has led to the most significant decline in home sales seen in eight months, according to Redfin. Home sales decreased by 0.5% in June compared to the previous month, marking the largest drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic figures.