Realtors are encountering an increasing number of indecisive buyers as the real estate market becomes more challenging.
A recent report from Redfin indicates that nearly 56,000 home-purchase agreements were canceled in June, accounting for 15% of all homes that went under contract that month. This marks the highest percentage ever recorded for June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributed the surge in cancellations to buyers who are more selective and facing higher costs in the current market. “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.
In Miami, Rafael Corrales, another Redfin agent, noted troubling trends, including last-minute cancellations over small details. Approximately 2,500 home purchases were canceled in Miami last month, making up about 17.6% of homes that went under contract in June. He cited affordability as the primary concern for both buyers and sellers.
The median home sale price hit a record $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to high home prices and elevated mortgage rates, potential buyers are also facing rising insurance costs, property taxes, HOA fees, and other expenses linked to homeownership, all intensified by inflation.
This decline in affordability has resulted in the most significant drop in home sales in eight months, with Redfin reporting that monthly home sales fell by 0.5% in June, the largest decrease since October 2023. Year-over-year, home sales saw a decrease of 1.1% and remained 21.5% below levels observed before the pandemic.