Realtors are facing an unprecedented number of indecisive buyers, as individuals become increasingly discerning in a challenging real estate environment.
A recent report from Redfin revealed that in June, nearly 56,000 home purchase agreements were abandoned, accounting for 15% of all homes that entered contracts that month. This represents the highest percentage of cancellations recorded for June by Redfin.
Julie Zubiate, a Premier real estate agent with Redfin in the San Francisco Bay Area, attributed the increase in buyer withdrawals to a market that is becoming more expensive, which leads buyers to be more selective.
“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, another Redfin agent based in Miami, noted that he has witnessed troubling situations, including last-minute cancellations over trivial matters. Approximately 2,500 home purchases were canceled in Miami last month, constituting about 17.6% of homes that had been under contract in June. Corrales pointed out that affordability remains the primary concern for buyers.
In June, the median home sale price hit a record of $442,525, with the average rate on a 30-year mortgage at 6.92%. Coupled with high home prices and elevated mortgage rates, potential buyers are also facing increased costs related to insurance, property taxes, homeowner association fees, and other expenses associated with homeownership, all made worse by inflation.
The overall unaffordability in the housing market has resulted in the largest decline in home sales in eight months, according to Redfin. Month-over-month, home sales decreased by 0.5% in June, marking the most significant drop since October 2023. Year-over-year, home sales fell by 1.1% and were down 21.5% from pre-pandemic levels.