Realtors are facing a surge of indecisive buyers as many become more selective in the 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 were under contract that month. This marks the highest cancellation rate recorded for a June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in buyer cancellations to a more discerning clientele struggling with higher market costs. “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, described witnessing “nightmare scenarios,” including last-minute cancellations triggered by minor details. In June, approximately 2,500 home purchases were called off in Miami, comprising about 17.6% of homes under contract. Corrales stated that the main concern for buyers is affordability.
The median home sale price hit a record high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. Besides the steep home prices and persistent high mortgage rates, potential buyers are also burdened by rising costs of insurance, property taxes, HOA fees, and other homeownership expenses aggravated by inflation.
This affordability crisis has led to a significant decline in home sales across the nation, marking the largest drop in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, the most substantial fall since October 2023. Year-over-year, home sales fell by 1.1% and remained 21.5% below pre-pandemic figures.