Realtors are facing an unprecedented number of indecisive buyers as the real estate market becomes increasingly challenging. A Redfin report released on Tuesday revealed that nearly 56,000 home-purchase agreements were abandoned in June, representing 15% of all homes that were under contract that month. This marks the highest cancellation rate for any June recorded by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the surge in cancellations to buyers becoming more discerning in a costly market. She noted that many are withdrawing from deals over minor issues, considering that the monthly expenses tied to purchasing a home today are significantly high.
In Miami, Redfin agent Rafael Corrales reported experiencing “nightmare scenarios” with last-minute cancellations due to small concerns. Last month, approximately 2,500 home purchases in Miami were called off, equating to about 17.6% of homes that entered contract in June. He emphasized that the main hurdle for buyers remains affordability.
In June, the median home sale price reached a new high of $442,525, while the average interest rate for a 30-year mortgage stood at 6.92%. Alongside the elevated home prices and persistent mortgage rates, prospective buyers are also facing additional costs such as insurance, property taxes, and homeowners association fees, all of which have been intensified by inflation.
This widespread lack of affordability has significantly impacted home sales across the nation, leading to the steepest decline in eight months, according to Redfin. Monthly home sales decreased by 0.5% in June, marking the largest drop since October 2023. Year-over-year, home sales saw a decline of 1.1% and were down 21.5% compared to pre-pandemic levels.