Realtors are experiencing an unprecedented number of indecisive buyers as individuals become increasingly selective in a challenging real estate market.
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According to a recent report by Redfin, nearly 56,000 home-purchase agreements were canceled in June, which amounts to 15% of all homes that went under contract that month. This marks the highest rate recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent from the San Francisco Bay Area, attributes the increase in cancellations to buyers being more discerning amid rising market costs. “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 stated.
Rafael Corrales, another Redfin agent based in Miami, noted that he has witnessed “nightmare scenarios” unfold, including last-minute cancellations over trivial matters. In Miami alone, approximately 2,500 home purchases were canceled last month, representing about 17.6% of homes that went under contract in June. However, Corrales highlighted that the primary concern remains affordability.
The median home sale price hit a record high of $442,525 in June, with the average rate for a 30-year mortgage at 6.92%. In addition to the escalating cost of homes and sustained high mortgage rates, potential homebuyers are also facing rising expenses related to insurance, property taxes, homeowners association fees, and other costs associated with homeownership, all of which have been aggravated by inflation.
The national lack of affordability in the housing market has led to the most significant decline in home sales in eight months, according to Redfin. Monthly home sales fell by 0.5% in June, marking the most considerable drop since October 2022. Year-over-year, home sales decreased by 1.1% and were 21.5% lower than pre-pandemic levels.