Redfin data shows home purchase cancelations have surged to an all-time high
Roughly 40,000 US home‑purchase agreements were canceled in December, equal to 16.3% of properties that went under contract that month. That's the highest December share in Redfin’s records back to 2017. The pullback highlights a market where buyers held more leverage but still wrestled with affordability and uncertainty.
The real estate giant's analysis of MLS data showed the December cancellation rate rose from 14.9% a year earlier, even as mortgage rates edged down from their 2025 peak and price growth eased.
Pending home sales overall declined to their lowest level on record outside the onset of the pandemic, leaving both lenders and originators contending with fewer deals and more that failed to reach the closing table.
Sun Belt metros led the way; Bay Area saw sharp rise
Atlanta posted the highest share of canceled contracts in December, with 22.5% of pending sales falling through. Jacksonville and San Antonio followed at 20.6%, with Cleveland and Tampa also near one in five.
On the other hand, Nassau County, New York, saw just 3.8% of contracts collapse, with San Francisco at 4.2% and San Jose at 8.9%.
San Jose registered the biggest year‑over‑year jump in cancellations, up 6.8 percentage points to 8.9%, followed by Oakland and Sacramento. Redfin characterized Atlanta as a fast‑moving buyer’s market, saying sellers there outnumbered buyers by more than 80%.
Other brokers have spoken about contracts being broken. Kristi Hardy, executive vice president, area manager, and senior loan officer with Atlantic Coast Mortgage, told Mortgage Professional America that, even before the shutdown, she was hearing about deals falling through in the Washington, DC, area.
“I don't know if it is exclusive to my market, but we are seeing a lot of people back out of their contracts,” Hardy said. “That's something that's been happening this whole year [2025]. I do think that there are people backing out due to uncertainty.”
Buyers used contingencies to walk away
“High housing costs and rising inventory have made homebuyers more selective,” Chen Zhao, head of economics research at Redfin, said.
“Home sellers outnumber buyers by a record margin, meaning the buyers who are in the market have options and may walk away if they believe they can find a better or more affordable home.”
Redfin said many buyers back out during the inspection period, sometimes citing structural or maintenance issues even when the real concern is the size of the monthly payment. Buyers are skittish and selective and quick to seek price cuts or concessions when new problems surface.
“People I've seen have been pretty careful about where they end up purchasing,” Melissa Cohn, regional vice president of William Raveis Mortgage, told Mortgage Professional America.
“If they see absolutely anything wrong, they are just jumping and saying, ‘I'm moving on to the next deal.’ But I think that has a lot to do with the fact that there is a lot more inventory in the marketplace today, and people can afford to be picky.”
Cohn said that in states where buyers can back out after an inspection, many are either canceling at the first sign of problems or trying to negotiate the price. Then it comes down to the seller if they’re willing to budge.
“If it's something you thought you wanted, and then an inspector finds several flaws, why would you have to put yourself into a property that you're going to have to go out and do some work?” she said.
“They'll either just cancel the contract or try to negotiate the price. And if it's something financial, they're willing to just bail, because no one wants to get caught in a condominium that has problems.”
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