Realtors are encountering an increasing number of indecisive buyers as the real estate market becomes more challenging and buyers become more selective.
In June, nearly 56,000 home purchase agreements collapsed, representing 15% of all contracts, according to a report from Redfin released on Tuesday. This marks the highest percentage of failed contracts for any June tracked by the company.
Julie Zubiate, a Premier real estate agent with Redfin in the San Francisco Bay Area, attributed the rise in buyer cancellations to the high costs associated with purchasing a home, which lead buyers to withdraw over minor issues. She noted that the costs are too significant for buyers to overlook their requirements.
Rafael Corrales, a Redfin agent based in Miami, described witnessing problematic scenarios where buyers canceled at the last moment due to trivial matters. In Miami alone, around 2,500 home purchases were annulled in June, accounting for approximately 17.6% of homes under contract. Corrales emphasized that the main concern for buyers is affordability.
The median sales price for homes hit a record high of $442,525 in June, while the average 30-year mortgage rate stood at 6.92%. Beyond the elevated home prices and mortgage rates, prospective buyers are also contending with rising costs from insurance, property taxes, homeowner association fees, and other expenses tied to homeownership, all intensified by inflation.
The growing lack of affordability has led to the most significant decline in home sales in the last eight months, as stated by Redfin. Month-over-month, home sales dropped by 0.5% in June, the largest decrease since October 2023. Year-over-year, sales experienced a 1.1% decline, and they are now 21.5% lower than pre-pandemic levels.