With Buyers Firmly in the Driver’s Seat, Home-Purchase Cancellations Hit Highest Level in Nearly 3 Years
- 14% of U.S. homebuying deals fell through in July, the highest share since November 2023, as buyers gained more power.
- Home-purchase cancellations are most prevalent in buyer-friendly southern markets, where a lot of inventory and fewer buyers are giving house hunters more confidence to walk away from deals.
- Contract cancellations are least common in competitive seller’s markets like Long Island and parts of the Bay Area, where limited inventory gives buyers more incentive to stick with a deal.
Nationwide, 14% of home-sale agreements that went under contract in July fell through–the highest share in nearly three years on a seasonally adjusted basis and up from 13.7% a month earlier.
While the rate of contract cancellations reached a nearly three-year high in July, the increase from months and years past is small. The share of U.S. homebuying deals that have fallen through has posted small swings, from about 13% to about 14%, for the last four years. Deals are falling through at a higher rate than in 2020-2022, when the U.S. was in a hot seller’s market.
This is based on a Redfin analysis of seasonally adjusted MLS pending-sales data using our updated housing data methodology. Please note: Homes that fell out of contract during a given month didn’t necessarily go under contract that same month. This data is subject to revision.
Contract cancellations are rising a bit because buyers have the power: The number of U.S. homebuyers dropped to a record low in July, and there were a near-record 51% more sellers than buyers in the market. That gives house hunters more options and makes them more likely to walk away if an inspection uncovers problems, an appraisal comes in low or the seller doesn’t agree to concessions.
Affordability challenges are making buyers more cautious, too. Home prices remain high and mortgage rates are elevated, leaving many buyers with little financial wiggle room. An unexpected repair, a change in financing costs or simply second thoughts about taking on a large monthly payment can be enough to derail a deal—especially when buyers feel confident another home will come along. Some house hunters are also changing their minds due to economic uncertainty.
“Sometimes buyers get cold feet before the inspection—they revisit the numbers with their lender, get anxious about the payment and never even send the deposit,” said Juan Castro, a Redfin Premier agent in Orlando. “Other times, they’ll find something relatively minor in the inspection and use it as leverage to ask for major concessions or walk away entirely. Buyers know they have options right now, so they’re pushing harder in negotiations. That can be tough for sellers, but it’s good news for buyers.”
The Silver Lining: Canceled Deals Can Create Opportunities For Sellers and Buyers
Today’s slower market gives both sides more room to problem-solve.
For sellers, preparation can reduce the odds of a deal falling apart. One option is to complete a home inspection before listing, which can flag issues that might otherwise surprise a buyer later. Sellers can then make repairs upfront or enter negotiations knowing they may need to offer a credit, price adjustment or other concession. If a deal does fall through, it’s not necessarily a sign that something is wrong with the home—sometimes a buyer’s financing changes or they simply get cold feet. Sellers can use what they learned from the first deal to make the next one smoother. Sellers may also consider pre-marketing their home with Redfin Early Access to gauge the market and set the right price from the beginning.
A cancellation can create an opening for other house hunters. A home that comes back on the market may face less competition, and the seller may be more motivated to reach an agreement the second time around. Buyers who lose out on a home they love can also ask their agent to officially put them in the backup position; if the first deal falls apart, they get another shot without having to start from scratch.
Home-Purchase Cancellations Are Most Common Where Buyers Have the Upper Hand
Deals are falling apart at the highest rate in the South. In Atlanta, 19.8% of home-purchase agreements were canceled in July, the highest share among the 50 most populous U.S. metros with sufficient data.
Next comes Houston, where 19.6% of homebuying contracts fell through. It’s followed by San Antonio (18.7%), Las Vegas (18.6%) and Orlando, FL (18.2%). Contract cancellations are most prevalent in those places partly because they’re among the strongest buyer’s markets in the country. In Houston, for instance, there are 130% more sellers than buyers.
Many of those southern metro areas were popular during the pandemic, when low mortgage rates and remote work encouraged many Americans to move to relatively affordable places. Now, higher costs, a glut of newly built homes and the increasing frequency of natural disasters, among other factors, have left a lot of homes sitting on the market.
Homebuying Deals Least Are Likely to Fall Apart in Long Island and the Bay Area
Contract cancellations were least common in Nassau County, NY in July, with just 3.5% of homebuying deals falling through.
Next come two Bay Area metros: San Francisco and San Jose, where 4.1% and 6.5% of deals fell apart, respectively. San Francisco’s housing market is booming, largely because of AI companies paying their workers high salaries and bonuses, making buyers less likely to back out when they go under contract.
Next are Montgomery County, PA (7.3%) and Milwaukee (7.7%). Nassau County, Montgomery County and Milwaukee are three of just six seller’s markets in the U.S.; buyers in those places are more motivated to hold deals together because there are fewer homes available to choose from, and sellers hold the power.
Cancellations Are Rising Fastest in Texas and Nashville
Contract cancellations increased month over month on a seasonally adjusted basis in most of the metros in this analysis. The biggest uptick was in Houston, where 19.6% of home-purchase agreements were called off in July, up from 14.4% a month earlier.
Next comes Nashville, TN, where 14.3% of homebuying agreements were canceled, up from 12.6%. Atlanta (19.8%, up from 18.5%), San Francisco (4.1%, up from 2.8%), and San Jose (6.5%, up from 5.4%) round out the top five. San Francisco and San Jose still have low rates of contract cancellations, but the rates were even lower in June.
Cancellations Declined Most in Indianapolis
Contract cancellations decreased most in Indianapolis, where 13.9% of deals were called off in July, down from 14.9% a month earlier. Anaheim, CA, where 13.5% of deals were canceled, down from 14.3%, comes next. Next come Milwaukee (7.7%, down from 8.4%), West Palm Beach, FL (14.2%, down from 14.8%) and Nassau County (3.5%, down from 4%).
| Metro-Level Summary: Canceled Home-Purchase Agreements, July 2026
Data is seasonally adjusted Redfin analyzed the 50 most populous U.S. metros and included the 48 with sufficient data |
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| U.S. metro area | Pending sales that fell out of contract, as % of overall pending sales | Month-over-month change in share of pending sales that fell out of contract (in percentage points) | Year-over-year change in share of pending sales that fell out of contract (in percentage points) |
| Anaheim, CA | 13.5% | -0.8 pts. | 0.7 pts. |
| Atlanta, GA | 19.8% | 1.3 pts. | 3.5 pts. |
| Austin, TX | 13.4% | 0.2 pts. | -0.3 pts. |
| Baltimore, MD | 13.3% | 0.0 pts. | 0.1 pts. |
| Boston, MA | 10.9% | -0.0 pts. | 1.7 pts. |
| Charlotte, NC | 12.2% | 0.3 pts. | 0.2 pts. |
| Chicago, IL | 13.8% | 0.5 pts. | 0.1 pts. |
| Cincinnati, OH | 12.9% | 0.2 pts. | 1.1 pts. |
| Cleveland, OH | 16.2% | 0.4 pts. | -0.3 pts. |
| Dallas, TX | 16.3% | 0.1 pts. | 0.6 pts. |
| Denver, CO | 17.2% | 0.2 pts. | 1.2 pts. |
| Detroit, MI | 17.3% | 4.6 pts. | 5.5 pts. |
| Fort Worth, TX | 18.1% | 0.0 pts. | 1.3 pts. |
| Houston, TX | 19.6% | 5.2 pts. | 5.6 pts. |
| Indianapolis, IN | 13.9% | -1.0 pts. | -1.0 pts. |
| Jacksonville, FL | 17.3% | 0.7 pts. | -0.7 pts. |
| Kansas City, MO | 12.8% | 0.0 pts. | -0.5 pts. |
| Las Vegas, NV | 18.6% | 0.8 pts. | 3.7 pts. |
| Los Angeles, CA | 16.1% | 1.1 pts. | 1.4 pts. |
| Miami, FL | 14.6% | -0.2 pts. | 1.0 pts. |
| Milwaukee, WI | 7.7% | -0.7 pts. | -0.6 pts. |
| Minneapolis, MN | 10.3% | 0.4 pts. | 0.7 pts. |
| Montgomery County, PA | 7.3% | -0.3 pts. | -0.7 pts. |
| Nashville, TN | 14.3% | 1.7 pts. | 2.9 pts. |
| Nassau County, NY | 3.5% | -0.5 pts. | -1.3 pts. |
| New Brunswick, NJ | 11.4% | 0.7 pts. | 1.2 pts. |
| New York, NY | 8.2% | 0.8 pts. | -0.2 pts. |
| Newark, NJ | 9.1% | 0.0 pts. | -0.3 pts. |
| Oakland, CA | 9.3% | 1.1 pts. | 1.2 pts. |
| Orlando, FL | 18.2% | 0.4 pts. | 1.4 pts. |
| Philadelphia, PA | 11.1% | -0.4 pts. | 0.7 pts. |
| Phoenix, AZ | 16.8% | -0.1 pts. | 1.6 pts. |
| Pittsburgh, PA | 14.3% | 0.6 pts. | 1.0 pts. |
| Portland, OR | 15.8% | -0.4 pts. | 2.2 pts. |
| Providence, RI | 11.2% | 0.6 pts. | 1.6 pts. |
| Riverside, CA | 17.2% | 0.3 pts. | 0.4 pts. |
| Sacramento, CA | 15.1% | 0.2 pts. | 2.3 pts. |
| San Antonio, TX | 18.7% | 0.3 pts. | -0.1 pts. |
| San Diego, CA | 14.8% | 0.7 pts. | 1.3 pts. |
| San Francisco, CA | 4.1% | 1.3 pts. | 0.5 pts. |
| San Jose, CA | 6.5% | 1.1 pts. | 1.3 pts. |
| Seattle, WA | 11.2% | 0.9 pts. | 2.4 pts. |
| St. Louis, MO | 13.4% | -0.2 pts. | -0.6 pts. |
| Tampa, FL | 18.0% | 0.6 pts. | 0.5 pts. |
| Virginia Beach, VA | 13.7% | 0.4 pts. | 0.1 pts. |
| Warren, MI | 12.3% | 3.3 pts. | 4.3 pts. |
| Washington, DC | 12.2% | 0.0 pts. | 0.2 pts. |
| West Palm Beach, FL | 14.2% | -0.6 pts. | 1.2 pts. |
| National | 14% | 0.3 pts. | 0.7 pts. |
The post With Buyers Firmly in the Driver’s Seat, Home-Purchase Cancellations Hit Highest Level in Nearly 3 Years appeared first on Redfin Real Estate News.
