Realtors are encountering an increasing number of indecisive buyers as consumers become more selective in a challenging real estate market. According to a report by Redfin, nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that were under contract during that month. This marks the highest rate for any June recorded by the real estate platform.
Julie Zubiate, a real estate agent with Redfin in the San Francisco Bay Area, attributes this surge in cancellations to buyers who are now much more discerning in their choices, especially in a market where costs are escalating. “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, echoed these sentiments, highlighting the “nightmare scenarios” that have unfolded, including last-minute cancellations for trivial reasons. In Miami alone, around 2,500 home purchases were scrapped last month, which represents about 17.6% of homes under contract in June. However, Corrales stressed that the underlying issue remains affordability.
June saw the median home sale price hit a record $442,525, while the average rate for a 30-year mortgage climbed to 6.92%. In addition to high home prices and elevated mortgage rates, prospective buyers are also facing challenges from insurance, property taxes, homeowners association fees, and other homeownership-related expenses that have been magnified by inflation.
The overall lack of affordability across the country has contributed to the steepest decline in home sales in eight months, according to Redfin. Monthly home sales fell by 0.5% in June, marking the largest decline since October 2023. Year-over-year sales also decreased by 1.1%, sitting 21.5% below pre-pandemic levels.