Realtors are experiencing an unprecedented wave of indecisive buyers as individuals become more discerning in a challenging real estate environment.
A recent report from Redfin revealed that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract during that month. This marks the highest percentage recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the increase in cancellations to buyers’ heightened selectivity and the burdensome costs associated with home buying today. “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,” Zubiate explained.
Rafael Corrales, a Redfin agent in Miami, noted significant issues, with cancellations occurring over trivial details. Approximately 2,500 home purchases were called off in Miami last month, representing about 17.6% of homes that were under contract in June. Corrales highlighted that the primary concern for buyers is affordability.
In June, the median home sale price reached a historic $442,525, while the average interest rate for a 30-year mortgage was reported at 6.92%. Beyond exorbitant home prices and high mortgage rates, potential buyers are also facing considerable expenses from insurance, property taxes, and homeowners association (HOA) fees, all of which have been affected by inflation.
This growing lack of affordability nationally has led to the largest drop in home sales in eight months, according to Redfin. On a monthly basis, home sales decreased by 0.5% in June, marking the most significant decline since October 2023. Year-over-year, home sales fell 1.1% and were 21.5% lower than pre-pandemic levels.