Realtors are facing an increase in indecisive buyers as individuals grow more selective in a challenging real estate market.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, amounting to 15% of all homes that entered into contract during that month. This marks the highest percentage recorded for any June.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to buyers who are hesitant due to high costs associated with homeownership. “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 stated.
In Miami, another Redfin agent, Rafael Corrales, noted instances of “nightmare scenarios” where buyers canceled agreements over trivial matters. In that city, approximately 2,500 home purchases were called off in June, representing around 17.6% of homes that went under contract. Corrales highlighted that the primary concern remains affordability.
The median home sale price hit a record high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. Alongside the elevated home prices and ongoing high mortgage rates, prospective buyers are also burdened by costs such as insurance, property taxes, HOA fees, and other homeownership expenses that have been intensified by inflation.
This widespread lack of affordability has led to a significant drop in home sales across the country, marking the biggest decline in eight months. Redfin’s report indicated that home sales decreased by 0.5% in June compared to the previous month, the steepest fall since October 2023. Year-over-year, home sales declined by 1.1% and remained 21.5% lower than levels observed before the pandemic.