Realtors are facing an unprecedented surge in indecisive buyers, as potential homeowners grow increasingly selective in a challenging real estate environment.
According to a recent report by Redfin, nearly 56,000 home-purchase agreements fell through in June, representing 15% of all homes that went under contract during that month. This marks the highest cancellation rate recorded for any June by the real estate platform.
Julie Zubiate, a Redfin Premier real estate agent in the San Francisco Bay Area, attributes the rise in cancellations to buyers who are more discerning and struggling with the steep costs of purchasing a home. She noted, “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.”
Rafael Corrales, another Redfin agent based in Miami, reported experiencing “nightmare scenarios” with clients, including last-minute cancellations prompted by trivial details. In Miami alone, around 2,500 home purchases were canceled in June, equating to about 17.6% of homes that went under contract. Corrales highlighted that the primary concern remains affordability.
The median home sale price reached a record high of $442,525 in June, while the average rate for a 30-year mortgage stood at 6.92%. In addition to soaring home prices and persistent mortgage rates, prospective buyers are also grappling with additional expenses like insurance, property taxes, and HOA fees, all of which have been amplified by inflation.
This widespread lack of affordability has contributed to a significant drop in home sales nationwide, as noted by Redfin. Month-on-month, home sales declined by 0.5% in June, marking the most substantial decrease since October 2023. Year-over-year, home sales fell 1.1% and were 21.5% lower than pre-pandemic figures.