Nearly one in seven contracts collapsed as buyers tested their bargaining power
More United States homebuyers than ever walked away from purchase contracts in February, capping a winter in which fear and leverage increasingly sat on the buyer’s side of the table.
Redfin reported that more than 42,000 home-sale agreements fell through last month, equal to 13.7% of homes that went under contract. That's the highest February share since the brokerage began tracking the metric in 2017. That was up from 12.8% a year earlier and roughly in line with elevated fall‑through rates seen in December and January.
Buyers wielded new leverage
Behind the numbers was a market in which listings outpaced demand and shoppers knew it. Redfin’s analysts said there were “hundreds of thousands more home sellers than buyers” nationwide, a gap that allowed buyers to use inspections, financing contingencies and simple second thoughts to walk away.
“Homes are falling out of contract left and right,” said Juan Castro, a Redfin Premier agent in Orlando, FL.
“Sometimes buyers make an offer but never send the deposit because they get nervous, sometimes they revisit numbers with lenders and don’t feel comfortable with the monthly payments, and other times they use a minor inspection issue as an excuse to back out. I’m also seeing buyers negotiate aggressively—for instance, maybe they ask for a brand-new roof because three shingles are missing on an otherwise perfectly good roof—then cancel the deal if the seller says no.”
Other brokers have spoken about contracts being broken.
“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.”
Regional gaps widened
In February, cancellations were most common in Tampa, FL, where 18.1% of purchase agreements fell through, followed by San Antonio and Atlanta at 17.9%.
All three ranked among Redfin’s strongest buyer’s markets, with Tampa showing 84% more sellers than buyers and San Antonio reporting more than twice as many sellers as buyers.
By contrast, just 3.7% of deals collapsed in San Francisco, 4.5% in Nassau County, NY, and 5.4% in San Jose, CA, markets Redfin still classified as seller‑friendly. In those metros, agents said backing out carried higher risk because replacement inventory remained thin.
Volatile rates kept borrowers skittish
Economic anxiety and rate whiplash also weighed on decision‑making. Buyers who saw 30‑year mortgage rates briefly dip below 6% early in the year then edge higher again faced a moving target on monthly payments, even as the Mortgage Bankers Association reported a modest rebound in application volume in early March.
Combined with concerns over inflation, job security and geopolitical tension, that volatility nudged some borrowers to pause or pull contracts before closing.
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.”
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