Realtors are experiencing an unprecedented number of indecisive buyers as individuals become increasingly selective in a challenging real estate market.
According to a report from Redfin released on Tuesday, nearly 56,000 home purchase agreements fell through in June, which amounts to 15% of all homes that went under contract that month. This represents the highest percentage recorded for any June by the real estate website.
Julie Zubiate, a Redfin Premier real estate agent based in the San Francisco Bay Area, attributed the increase in canceled deals to buyers who are more discerning due to the high costs of the current market. She noted, “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.”
In Miami, Redfin agent Rafael Corrales reported “nightmare scenarios,” including last-minute cancellations over minor factors. Last month, about 2,500 home purchases were canceled in Miami, representing approximately 17.6% of homes that went under contract in June. Corrales emphasized that the core issue remains affordability.
The median home sale price reached a record $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to the elevated home prices and persistent mortgage rates, prospective buyers are facing increased burdens from insurance, property taxes, homeowner association fees, and other homeownership costs, all worsened by inflation.
This nationwide lack of affordability has led to the most significant decline in home sales in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the largest drop since October 2023. On an annual basis, home sales fell by 1.1% and were 21.5% below pre-pandemic levels.