Realtors are encountering an unprecedented number of indecisive buyers as individuals become more selective amid challenging conditions in the real estate market.
A recent report from Redfin reveals that nearly 56,000 home-purchase agreements fell through in June, accounting for 15% of all homes that entered contracts that month. This represents the highest cancellation rate recorded for June by the real estate firm.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes this increase in buyer withdrawals to a more discerning clientele struggling with high market costs. She noted that buyers are opting out due to minor issues, as current monthly expenses related to home purchases are too significant for them to overlook any shortcomings on their wish lists.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” where last-minute cancellations arise over trivial details. His market witnessed about 2,500 canceled home purchases in June, translating to 17.6% of homes that went under contract. However, Corrales highlighted that the primary concern remains affordability.
The median home sale price soared to a record $442,525 in June, with the average rate on a 30-year mortgage standing at 6.92%. Alongside the high home prices and elevated mortgage rates, potential buyers are also burdened by various costs associated with homeownership, such as insurance, property taxes, and HOA fees, all of which have been pushed higher by inflation.
This widespread lack of affordability has contributed to the most significant decline in home sales in eight months, as reported by Redfin. Month-over-month, home sales fell by 0.5% in June, marking the largest drop since October 2022. Comparatively, year-over-year sales decreased by 1.1% and were down 21.5% from pre-pandemic figures.