Realtors are encountering an unprecedented number of indecisive buyers as prospective homeowners become increasingly selective in a challenging real estate market.
According to a report from Redfin released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that entered contracts that month. This marks the highest percentage of cancellations recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the increase in cancellations to buyers who are more discerning, facing a costly market. “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,” she explained.
Rafael Corrales, a Redfin agent in Miami, reported witnessing “nightmare scenarios,” including last-minute contract withdrawals over trivial details. In Miami, around 2,500 home purchases were canceled last month, equating to about 17.6% of homes that went under contract in June. He indicated that the primary concern is affordability.
The median home sale price hit a record high of $442,525 in June, with the average rate on a 30-year mortgage reaching 6.92%. Along with elevated home prices and persistently high mortgage rates, potential buyers are also grappling with rising expenses for insurance, property taxes, HOA fees, and other costs associated with homeownership, all intensified by inflation.
The nationwide affordability crisis has led to a significant drop in home sales, noted Redfin. Sales fell by 0.5% month-over-month in June, marking the largest decrease since October 2023. Year-over-year, home sales declined by 1.1% and are 21.5% lower than pre-pandemic levels.