Realtors are encountering a surge in indecisive buyers as individuals become more selective in a challenging real estate market.
In June, nearly 56,000 home purchase agreements were terminated, accounting for 15% of all homes under contract that month. This statistic marks the highest percentage for any June since records began, according to a recent report from Redfin.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the increase in buyers backing out to their desire for more specific features amid soaring market prices. “They’re stepping away due to minor issues because the monthly costs of purchasing a home today are too high to justify not having all their must-haves,” she explained.
Rafael Corrales, a Redfin agent in Miami, noted distressing last-minute cancellations over trivial matters. Last month, approximately 2,500 home purchases were canceled in Miami, representing about 17.6% of homes that went under contract in June. However, Corrales emphasized that the core issue is affordability.
The median home sale price hit a record $442,525 in June, with the average interest rate on a 30-year mortgage at 6.92%. In addition to high property prices and elevated mortgage rates, potential buyers are burdened by insurance costs, property taxes, HOA fees, and other homeownership expenses that have increased due to inflation.
This nationwide lack of affordability has led to the most significant drop in home sales in the past eight months, according to Redfin. There was a 0.5% decline in home sales in June compared to the previous month—the largest decrease since October 2023. Year-over-year, home sales decreased by 1.1% and remained 21.5% below pre-pandemic levels.