Realtors are encountering an increasing number of indecisive buyers as the real estate market becomes more challenging.
A recent report from Redfin reveals that nearly 56,000 home-purchase agreements were canceled in June, representing 15% of all homes that were under contract that month. This percentage marks the highest level recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier agent in the San Francisco Bay Area, attributes the surge in cancellations to buyers who are becoming more selective in response to rising 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, described witnessing “nightmare scenarios,” including last-minute purchase cancellations over trivial matters. In Miami alone, approximately 2,500 home purchases were canceled in June, equating to about 17.6% of homes that went under contract. Corrales emphasized that affordability remains the primary challenge for buyers.
In June, the median home sale price hit a record high of $442,525, with the average rate on a 30-year mortgage reaching 6.92%. Alongside the elevated home prices and ongoing high mortgage rates, prospective buyers are also facing increased financial burdens from insurance, property taxes, HOA fees, and other costs related to homeownership, all of which have been impacted by inflation.
The nationwide struggle with affordability has resulted in the largest decline in home sales in eight months, as reported by Redfin. Monthly home sales decreased by 0.5% in June, representing the most significant drop since October 2023. Year-over-year, sales fell by 1.1% and were 21.5% below pre-pandemic levels.