Realtors are encountering an unprecedented number of indecisive buyers as the challenging real estate market leads to heightened expectations.
A recent report from Redfin revealed that nearly 56,000 home purchase agreements fell through in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage recorded by Redfin for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to buyers who are becoming more particular, facing a more expensive 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,” Zubiate explained.
Rafael Corrales, another Redfin agent based in Miami, shared that he has witnessed “nightmare scenarios” with last-minute cancellations over trivial concerns. Approximately 2,500 home purchases were canceled in Miami last month, representing about 17.6% of homes that entered contracts in June. Corrales noted that the primary concern for buyers remains affordability.
The median home sale price soared to a record $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. In addition to the steep home prices and high mortgage rates, prospective buyers are facing challenges from rising insurance, property taxes, HOA fees, and other costs associated with homeownership, all intensified by inflation.
This ongoing affordability crisis has led to significant declines in home sales nationwide. According to Redfin, home sales saw their largest drop in eight months, with a 0.5% monthly decrease in June—the biggest since October 2023. Year-over-year, home sales fell by 1.1%, placing them 21.5% below pre-pandemic levels.