Realtors are navigating an increasing number of indecisive buyers as the real estate market becomes tougher. A recent report from Redfin revealed that nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that were under contract during that month. This is the highest percentage recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to buyers becoming more selective in response to the rising costs of homeownership. She noted that buyers are opting out of deals over minor issues because the monthly expenses associated with purchasing a home are substantial, making them hesitant to forgo any items on their wish list.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios,” with some clients canceling last-minute due to trivial concerns. Approximately 2,500 home purchases were scrapped in Miami last month, constituting about 17.6% of homes that went under contract in June. Corrales pointed out that the main challenge remains affordability.
The median home sale price hit a record $442,525 in June, coinciding with an average 30-year mortgage rate of 6.92%. In addition to steep home prices and mortgage rates, buyers are also facing rising costs from insurance, property taxes, homeowners association fees, and other expenses linked to homeownership, all intensified by inflation.
This struggle with affordability has led to a noticeable decline in home sales nationwide, marking the steepest drop in eight months according to Redfin. Month-over-month, home sales decreased by 0.5% in June, the largest decline since October 2023. Year-over-year comparisons showed a 1.1% dip in sales, which are now 21.5% below pre-pandemic levels.