Realtors are encountering an increasing number of indecisive buyers, as preferences sharpen in today’s challenging real estate market.
According to a recent report from Redfin, nearly 56,000 home-purchase agreements collapsed in June, accounting for 15% of all homes that went under contract that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the spike in cancellations to buyers who are becoming more discerning amidst a costly market. “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 explained.
Rafael Corrales, another Redfin agent based in Miami, has witnessed “nightmare scenarios,” including last-minute withdrawals over trivial matters. Miami saw approximately 2,500 home purchase cancellations last month, representing about 17.6% of the homes that went under contract in June. However, Corrales highlighted that the primary challenge remains affordability.
In June, the median home sale price hit a record high of $442,525, with the average rate on a 30-year mortgage at 6.92%. Coupled with elevated home prices, ongoing high mortgage rates, and additional burdens such as insurance, property taxes, and HOA fees, potential homebuyers are grappling with substantial costs linked to homeownership that have increased due to inflation.
The widespread lack of affordability in the housing market has led to the greatest decline in home sales in eight months, as reported by Redfin. Monthly home sales fell by 0.5% in June, the most significant drop since October 2022. On a year-over-year basis, home sales decreased by 1.1%, remaining 21.5% below levels seen before the pandemic.