Realtors are facing an increasing number of indecisive buyers as the real estate market becomes more challenging.
According to a recent report by Redfin, nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that went under contract that month. This marks the highest cancellation rate recorded for June by the real estate platform.
Julie Zubiate, a real estate agent with Redfin Premier in the San Francisco Bay Area, attributes the surge in cancellations to buyers becoming more selective due to the financial strains of the current market. She noted that many are backing out for minor issues because the financial commitments associated with home buying are now perceived as too high if they cannot secure everything on their wishlist.
In Miami, Redfin agent Rafael Corrales reported experiencing difficult situations involving last-minute cancellations over trivial matters. In June alone, around 2,500 home purchases were called off in Miami, constituting approximately 17.6% of homes that had entered contracts. Corrales highlighted that the primary concern for buyers remains affordability.
The median sale price for homes reached a record level of $442,525 in June, while the average rate for a 30-year mortgage was reported at 6.92%. In addition to the elevated home prices and persistently high mortgage rates, potential buyers are struggling with rising costs related to insurance, property taxes, homeowners association fees, and various expenses linked to homeownership, all intensified by inflation.
The widespread lack of affordability has resulted in the most significant decline in home sales nationwide in the past eight months, as per Redfin’s findings. Monthly home sales dipped by 0.5% in June, which is the largest decrease since October 2023. On a year-over-year basis, home sales dropped by 1.1%, falling 21.5% below levels seen prior to the pandemic.