Realtors are encountering an unprecedented number of indecisive buyers as individuals become more selective amid a tough real estate market.
In June, nearly 56,000 home purchase agreements were canceled, representing 15% of all homes under contract that month, according to a report from Redfin released on Tuesday. This marks the largest percentage of cancellations recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier agent based in the San Francisco Bay Area, attributes the increase in buyer hesitance to a more discerning clientele faced with rising market costs. She noted that buyers are withdrawing from deals over minor concerns since the financial commitments tied to purchasing a home have become significant.
Rafael Corrales, a Redfin agent in Miami, observed similar patterns, describing various distressing scenarios, including last-minute withdrawals due to trivial issues. In Miami alone, approximately 2,500 home purchases were canceled last month, accounting for about 17.6% of homes that went under contract in June. However, Corrales cited affordability as the primary concern.
The median home sales price hit a record $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to the high home prices and elevated mortgage rates, potential homebuyers are also burdened by costs such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
This widespread affordability crisis has led to a notable drop in home sales nationwide. According to Redfin, June witnessed a 0.5% month-over-month decrease in home sales, marking the largest decline observed since October 2023. Year-over-year, home sales fell by 1.1% and were 21.5% lower than levels seen before the pandemic.