Home-Purchase Agreement Cancellations Reach Record High
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New data from Redfin shows that home-purchase agreement cancellations reached a record rate over the summer. In July, approximately 58,000 U.S. home-purchase agreements fell through, representing 15.3% of all homes that went under contract that month. This figure is up from 14.5% a year earlier and marks the highest cancellation rate for July since records began in 2017.
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Why More Home-Purchasing Agreements Are Being Canceled
Dig deeper: According to Redfin, home purchases are falling through at higher rates as elevated prices, steep mortgage costs, and broader economic uncertainty leave many buyers uneasy. With more inventory available than in recent years, buyers often have the upper hand and feel less urgency to commit. As a result, many people walk away during the inspection period—either because a more appealing home comes on the market or they uncover issues they’re unwilling to address.
A sold sign is posted in front of a house in Washington, DC, on February 26, 2022. (Photo by Stefani Reynolds / AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images)
“I recently had an older first-time buyer get cold feet the week before the deal was supposed to close,” Cleveland Redfin Premier real estate agent Bonnie Phillips said in a news release. “It was a beautiful house, we got it for the price she wanted and there were no issues in the inspection, but her neighbors convinced her that owning is too much of a hassle and she should rent instead.”
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Where Home Purchases Are Falling Through
By the numbers: In July, San Antonio saw 730 home-purchase agreements fall through, accounting for 22.7% of all pending sales—the highest share among the metros analyzed by Redfin. Following San Antonio were Fort Lauderdale, FL (21.3%), Jacksonville, FL (19.9%), Atlanta (19.7%), and Tampa, FL (19.5%). Redfin’s analysis covered the 50 largest U.S. metro areas, with 44 included based on sufficient data.
Florida and Texas, the nation’s leaders in new home construction, are seeing elevated cancellation rates as some buyers feel confident they can find alternatives that better meet their needs. In Florida specifically, concerns about rising natural disasters, coupled with surging insurance premiums and HOA fees, are also causing buyers to reconsider.
At the other end of the spectrum, cancellations were lowest in Nassau County, NY (5.1%), followed by Montgomery County, PA (8.2%), Milwaukee (8.3%), New York City (9.5%), and Seattle (10.2%).
Where the Largest Uptick in Cancellations Is Happening
By the numbers: In Virginia Beach, VA, nearly 500 home-purchase agreements fell through in July, representing 16.1% of homes that went under contract. That’s a 3.6 percentage-point jump from 12.5% a year earlier—the largest increase among all metros analyzed. Following Virginia Beach were Newark, NJ (+3.3 ppts), Baltimore (+3 ppts), San Antonio (+2.8 ppts), and Houston (+2.8 ppts).
A separate Redfin analysis shows Virginia Beach has the highest concentration of homeowners with VA loans among major metros, with Baltimore also ranking near the top.
Conclusion
The recent data from Redfin indicates that home-purchase agreement cancellations have reached a record high, with approximately 58,000 U.S. home-purchase agreements falling through in July. This trend is attributed to elevated prices, steep mortgage costs, and broader economic uncertainty, leaving many buyers uneasy. As the housing market continues to evolve, it’s essential to stay informed about the latest trends and developments.
Frequently Asked Questions
Q: What is the current rate of home-purchase agreement cancellations?
A: According to Redfin, the current rate of home-purchase agreement cancellations is 15.3%, which is the highest rate since records began in 2017.
Q: Why are home-purchase agreements being canceled at a higher rate?
A: Home-purchase agreements are being canceled at a higher rate due to elevated prices, steep mortgage costs, and broader economic uncertainty, leaving many buyers uneasy.
Q: Which cities are seeing the highest rates of home-purchase agreement cancellations?
A: San Antonio, Fort Lauderdale, FL, Jacksonville, FL, Atlanta, and Tampa, FL are seeing the highest rates of home-purchase agreement cancellations, with San Antonio having the highest share at 22.7%.
Q: What is the impact of rising natural disasters on home-purchase agreements in Florida?
A: Rising natural disasters, coupled with surging insurance premiums and HOA fees, are causing buyers to reconsider purchasing homes in Florida, leading to a higher rate of cancellations.
