Redfin data showed nearly one in seven January contracts collapsed
Nearly one in seven United States home sales that went under contract in January fell apart before closing, extending a trend that already unsettled lenders, brokers and builders through 2025.
Real estate giant Redfin reported that roughly 40,000 home-sale agreements were canceled, equal to 13.7% of January contracts, the highest share for that month since it began tracking the data in 2017.
The brokerage’s analysis of MLS pending-sales data showed cancellations remained highly seasonal, with elevated failure rates in late autumn and winter and fewer in the spring.
Still, the latest January reading sat above last year’s 13.1% and followed a record December, when 16.3% of contracts nationwide were abandoned.
Redfin also cautioned that the figures are subject to revision, and that some canceled deals went under contract in prior months.
“More buyers are backing out,” said Alin Glogovicean, a Redfin Premier agent in Los Angeles, where 16.7% of agreements were canceled in January, up from 15% a year earlier.
“They’re second-guessing the wisdom of making a huge purchase when there’s a fear in the back of their mind about the state of the economy and the uncertainty of their finances. That’s particularly true when they’re first-time buyers who don’t have equity from a previous home sale, and they’re using most or all of their savings on a down payment.”
Miki Adams, president of CBC Mortgage Agency, said that while it’s great there are new ideas to consider, she urges decision-makers to ensure affordability is sustainable. “Ideas like extended loan terms are good in that they reflect the urgency,” Adams told Mortgage Professional America.
“There's a recognition of the urgency of solving an affordability crisis, but long-term solutions really have to focus on sustainability. Extending debt over decades can reduce monthly payments, but it also increases total cost and financial risk.
“More realistic solutions include increasing access to responsible down payment assistance, supporting housing supply, and investing in borrower education. When we take these approaches, buyers can enter the market sooner, while maintaining long-term financial stability. No matter what their approach is, it needs to focus on long-term sustainability.”
Buyers’ market gave house-hunters room to walk away
Redfin’s metro-level breakdown underscored how much leverage buyers held in several Sun Belt markets.
In San Antonio, 21.2% of contracts were canceled, the highest rate among 47 large metros analyzed, followed by Atlanta at 18.5% and Cleveland at 17.9%.
Riverside, California, and Orlando, Florida, both recorded cancellation shares above 17%.
In San Antonio there were roughly twice as many sellers as buyers, and in Atlanta about 80% more, giving house-hunters ample alternatives when inspections turned up issues or a better listing hit the market.
By contrast, San Francisco posted a 3.5% cancellation rate, with Nassau County, New York, San Jose, Milwaukee and Oakland also seeing comparatively low levels, consistent with tighter, more seller-tilted inventory conditions.
Cancellations added to a longer cooling pattern
In January 2025, 14.3% of contracts fell through, then the highest January level on record. 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.
Those pressures persisted into early 2026. Redfin recently noted that while price growth and mortgage rates eased slightly, affordability remained stretched and pending home sales in January fell to their lowest seasonally adjusted level since late 2023.
Economic unease around layoffs, tariffs and geopolitical tensions continue to keep many would-be buyers on the sidelines or backing out late in the process.
“I think if rates remain stable, then hopefully we’ll see some improvement because a lot of people put off making a move last year,” Melissa Cohn, regional vice president at William Raveis Mortgage, told Mortgage Professional America.
“But hopefully inflation will stabilize and head back down towards the 2% level, the Fed will enact two additional rate cuts this year, we’ll see lower rates and we’ll have a better year.”
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