Realtors are facing an increasing number of indecisive buyers as consumers become more selective in a challenging real estate market.
A recent report from Redfin reveals that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation rate for any June recorded by the site.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributes the rise in cancellations to buyers being more discerning amid escalating market prices. She noted that many are backing out over minor concerns, stating, “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, highlighted troubling trends, mentioning last-minute pullouts due to small issues. In Miami alone, approximately 2,500 home purchases were canceled in June, amounting to about 17.6% of the contracts signed. Corrales pointed out that the primary challenge is affordability.
In June, the median home sale price reached a record-high of $442,525, while the average 30-year mortgage rate stood at 6.92%. Prospective buyers are further burdened by the rising costs of insurance, property taxes, HOA fees, and other expenses associated with homeownership, all intensified by inflation.
This widespread lack of affordability in the housing market has led to the largest decline in home sales in eight months, according to Redfin. Month-over-month, home sales declined by 0.5% in June, marking the biggest drop since October 2023. Year-over-year, home sales decreased by 1.1% and remain 21.5% below the levels seen before the pandemic.