In the current real estate market, realtors are encountering an increasing number of indecisive buyers as they become more selective in their choices. A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, equating to 15% of all homes that were under contract during that month. This marks the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the rise in cancellations to buyers who are reluctant to proceed due to the high costs associated with homeownership. “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.
In Miami, fellow Redfin agent Rafael Corrales noted experiencing “nightmare scenarios,” where clients would back out at the last minute over trivial details. In June alone, around 2,500 home purchases were canceled in Miami, amounting to roughly 17.6% of homes under contract. Corrales emphasized that the predominant concern for buyers is affordability.
With the median home sale price hitting a record $442,525 in June and the average 30-year mortgage rate at 6.92%, potential homebuyers are facing significant financial hurdles. The combination of high home prices, persistent mortgage rates, and additional costs such as insurance, property taxes, and HOA fees—further exacerbated by inflation—are overwhelming many buyers.
Overall, the challenging affordability landscape has led to the most substantial decline in home sales seen in eight months. Redfin reported a 0.5% decrease in home sales for June compared to the previous month, marking the largest drop since October 2023. On a year-over-year basis, home sales have decreased by 1.1% and stand at 21.5% below pre-pandemic levels.