Realtors are encountering a growing number of indecisive buyers as individuals become more selective in a challenging real estate market.
In June, nearly 56,000 agreements to purchase homes fell through, representing 15% of all homes that went under contract that month, according to a report by Redfin. This marks the highest percentage for any June recorded by the platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in cancellations to buyers who are feeling the pressure of high prices and are unwilling to compromise on their requirements.
“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 stated.
Rafael Corrales, a Redfin agent in Miami, described some “nightmare scenarios,” citing last-minute cancellations over minor details. Last month, around 2,500 home purchases were canceled in Miami, accounting for approximately 17.6% of homes that were under contract in June. Corrales emphasized that the main concern is affordability.
The median home sale price hit a record $442,525 in June, while the average rate for a 30-year mortgage was 6.92%. In addition to high home prices and elevated mortgage rates, prospective buyers are overwhelmed by additional expenses such as insurance, property taxes, and homeowner association fees, all of which have been affected by inflation.
The nationwide lack of affordability has led to a significant decline in home sales, which saw the largest drop in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the most considerable decline since October 2022. Year-over-year, sales fell by 1.1%, and were 21.5% below pre-pandemic levels.