Realtors are facing an increasing number of indecisive buyers as consumers become more selective in a challenging real estate market.
In June, nearly 56,000 home purchase contracts were canceled, representing 15% of all homes that were under contract that month, according to a report from Redfin released on Tuesday. This marks the highest percentage of cancellations recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributed the rise in buyer hesitance to the growing demands of purchasers dealing with higher market costs. “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,” she noted.
Rafael Corrales, another Redfin agent based in Miami, reported witnessing “nightmare scenarios,” including last-minute cancellations over trivial matters. Approximately 2,500 home purchases were canceled in Miami last month, equating to about 17.6% of homes that went under contract in June. Corrales emphasized that the crux of the issue is affordability.
The median home sale price hit a record high of $442,525 in June, with the average rate for a 30-year mortgage standing at 6.92%. In addition to the elevated home prices and persistent mortgage rates, prospective buyers are further burdened by insurance, property taxes, HOA fees, and other expenses associated with homeownership, all of which have been worsened by inflation.
The affordability crisis in the market has led to the most significant decline in home sales in eight months, according to Redfin. Monthly home sales dropped by 0.5% in June, marking the largest decrease since October 2023. Year-over-year, home sales fell by 1.1% and were down 21.5% from pre-pandemic levels.