Realtors are facing an increasing number of indecisive buyers as the challenging real estate market forces people to be more selective.
In June, almost 56,000 home-purchase agreements were abandoned, representing 15% of all homes that went under contract that month, according to a report from Redfin. This marks the highest rate for any June recorded 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 purchasing a home. She stated, “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.”
Rafael Corrales, a Redfin agent in Miami, noted that he has encountered “nightmare scenarios” where buyers cancel agreements at the last minute over trivial details. In Miami alone, around 2,500 home purchases were canceled last month, which accounts for approximately 17.6% of homes that went under contract in June. Corrales emphasized that the primary concern for buyers is affordability.
The median home sale price reached a record high of $442,525 in June, with the average 30-year mortgage rate at 6.92%. In addition to these elevated home prices, potential buyers are also grappling with rising insurance costs, property taxes, homeowners association fees, and other financial burdens that have been intensified by inflation.
This lack of affordability has led to the largest decline in home sales in eight months, according to Redfin. Home sales decreased by 0.5% month-over-month in June, marking the most significant drop since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than pre-pandemic levels.