Realtors are experiencing a surge in indecisive buyers as people become increasingly selective in a challenging real estate market. According to a Redfin report released on Tuesday, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract in that month. This figure marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers who are more discerning and facing higher costs in the housing market. She noted that buyers are opting to back out of deals due to minor issues because the financial implications of purchasing a home have become so significant that they want to ensure all their criteria are met.
Rafael Corrales, a Redfin agent in Miami, reported experiencing “nightmare scenarios” where last-minute cancellations occur over trivial details. In Miami alone, around 2,500 home purchases were canceled in June, accounting for about 17.6% of contracts that month. Corrales emphasized that the main challenge for buyers is affordability.
The median home sale price reached a record high of $442,525 in June, coupled with an average 30-year mortgage rate of 6.92%. Along with the high home prices and ongoing elevated mortgage rates, prospective buyers are facing additional financial burdens such as insurance, property taxes, HOA fees, and other costs of homeownership, all of which have been worsened by inflation.
This affordability crisis has led to a significant decline in home sales nationwide, marking the largest decrease in eight months, as reported by Redfin. Monthly home sales fell by 0.5% in June, the steepest drop since October 2023. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.