Realtors are encountering an increasing number of indecisive buyers as preferences shift in a challenging real estate market.
In June, nearly 56,000 home-purchase agreements were canceled, representing 15% of all homes that entered contracts that month, according to a report from Redfin published on Tuesday. This marks the highest percentage for the month of June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the uptick in buyers backing out to the demanding nature of the current market, which has led to a more discerning clientele.
“They’re opting out due to minor concerns because the financial burden of purchasing a home today makes it crucial to meet all their must-have criteria,” Zubiate explained.
Rafael Corrales, a Redfin agent based in Miami, reported witnessing “nightmare scenarios,” including last-minute cancellations for insignificant details. In Miami alone, about 2,500 home purchases were annulled last month, accounting for roughly 17.6% of homes that went under contract in June. However, Corrales emphasized that the predominant issue remains affordability.
The median home sale price surged to an all-time high of $442,525 in June, with the average rate for a 30-year mortgage reaching 6.92%. Alongside the elevated prices and mortgage rates, prospective buyers are also burdened by insurance, property taxes, homeowners association fees, and other costs related to homeownership, all of which have been intensified by rising inflation.
This widespread lack of affordability has led to the largest decline in home sales nationwide in eight months, as reported by Redfin. Monthly home sales decreased by 0.5% in June, marking the most significant drop since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.