Pending Home-Sale Cancellations on the Rise
A new study reveals that pending home-sale cancellations are on the rise, at nearly 15% for 2025. Redfin analyzed MLS pending-sales data for 44 major U.S. metropolitan areas. This increase in cancellations is a significant indicator of the current state of the real estate market.
Pending Home Sales are Falling Through More Frequently
According to the data, 14.9% of pending home sales fell through in June, up from 13.9% a year earlier. This means that just over 57,000 home-sale agreements nationwide were canceled in June, making it the highest June share in records dating back to 2017. “Buyers have leverage,” Crystal Zschirnt, a Redfin agent in Dallas, said in a statement. “Some buyers are canceling deals because another home pops up in the same price range that they like better, or because they discover a flaw and get nervous it’ll cost too much to fix. I’ve also heard of some buyers backing out because they’re hoping home prices or mortgage rates are going to plummet soon, even though that’s unlikely.”
The cities with the highest cancellation rates were primarily located in the Sun Belt. In Jacksonville, FL, more than one in five (21.4%) home-purchase agreements were canceled in June, the highest share of 44 major U.S. metros Redfin analyzed. This was followed by Las Vegas (19.7%) and Atlanta (19.6%).
A “Sale Pending” sign in front of a home in the West Seattle neighborhood of Seattle, Washington, US, on Tuesday, June 18, 2024. (Credit: David Ryder/Bloomberg via Getty Images)
The Sun Belt was home to all of the metros with the highest cancellation rates: San Antonio, Tampa, Orlando, Riverside, California, Phoenix, Fort Worth, Texas, and Miami rounded out the top 10. On the other end of the spectrum, just 5.4% of home-purchase agreements in Nassau County, New York were canceled in June, the lowest share of the metros Redfin analyzed. This was followed by Montgomery County, Pennsylvania (6.8%) and Milwaukee (8.2%).
Is it a Buyer’s Market Now?
A so-called “buyer’s market” is when the quantity of goods outnumbers potential buyers, meaning buyers are in a better position to have their pick of inventory and negotiate a deal. U.S. home listing prices are at an all-time high, signaling a potential shift toward a buyers’ market, according to industry experts. In fact, as of April 2025, there were 500,000 more people selling homes than buying them. Redfin said the last time homebuyers were this low was during the start of the COVID-19 pandemic, and before that was in 2013.
Redfin also said that pending home sales are falling through at a higher rate than in the past largely because it’s a buyer’s market. “There are hundreds of thousands more U.S. home sellers than buyers, giving buyers more options to choose from and more negotiating power. Buyers have room to be picky; they may back out during the inspection period if a better home comes up for sale or they discover an issue they don’t want to fix,” the real estate company continued. This also means, sellers may need to work harder to keep transactions from falling apart, and this could mean better deals for the buyer.
“Sellers are willing to make deals because in today’s buyer’s market, they don’t want to lose out on a sale once they have a buyer under contract,” said Van Welborn, a Redfin agent in Phoenix. “A few years ago, when the market was more competitive, sellers were able to tell buyers to move on rather than pay for repairs found during the inspection period. Now, sellers are they’re doing whatever they can to close the deal. I have one buyer who discovered a septic issue on an ultra-luxury home and was able to talk the seller into reducing the price by $1 million.”
What does this mean for the real estate market?
Since experts say it is now a buyer’s market, Redfin expects home prices to decline 1% year over year nationwide by the end of 2025, and mortgage rates to remain essentially unchanged in the 6.8% range. And with the number of sellers outpacing buyers, Redfin chief economist Daryl Fairweather also told FOX Business that the market is poised to shift over the next couple of months. “All these homes are listed for really high prices, which is why they are sitting on the market. But buyers can’t afford at these high prices, which is why they’re backing off of the market,” Fairweather said, adding that mortgage rates, insurance costs and property taxes are high. “Buyers just aren’t biting at these prices.”
Bottom line: History shows that home prices cool when sellers outnumber buyers. The Source: The information for this story was provided by Redfin’s analysis published on July 21. The data is seasonal, and typically, there’s a higher share of cancellations at the end of the year and a lower share in the spring. That’s why Redfin compared this June to past Junes. This story was reported from Los Angeles.
Conclusion
The rise in pending home-sale cancellations is a clear indication that the real estate market is shifting towards a buyer’s market. With more sellers than buyers, buyers have the upper hand in negotiations, and sellers may need to work harder to keep transactions from falling apart. This could lead to better deals for buyers and a decline in home prices. As the market continues to evolve, it’s essential for buyers and sellers to stay informed and adapt to the changing landscape.
Frequently Asked Questions
Q: What is a buyer’s market?
A: A buyer’s market is when the quantity of goods outnumbers potential buyers, giving buyers more negotiating power and options to choose from.
Q: Why are pending home sales falling through at a higher rate?
A: Pending home sales are falling through at a higher rate largely because it’s a buyer’s market, with more sellers than buyers, giving buyers the upper hand in negotiations.
Q: What can sellers do to keep transactions from falling apart?
A: Sellers may need to work harder to keep transactions from falling apart by being more willing to make deals and concessions to buyers.
Q: What does the future hold for the real estate market?
A: Redfin expects home prices to decline 1% year over year nationwide by the end of 2025, and mortgage rates to remain essentially unchanged in the 6.8% range.
Q: What is the current state of the real estate market?
A: The current state of the real estate market is a buyer’s market, with more sellers than buyers, giving buyers more negotiating power and options to choose from.
Q: How will the market shift over the next couple of months?
A: The market is poised to shift over the next couple of months, with Redfin chief economist Daryl Fairweather predicting that home prices will cool when sellers outnumber buyers.
