Homebuyers Are Canceling Deals at a Record Rate. Here’s Why.

• Roughly 56,000 U.S. home-purchase agreements were canceled in August, equal to 15.1% of homes that went under contract that month—the highest August percentage in records dating back to 2017.

• Buyers frequently back out of deals when they find issues during the inspection, they have trouble selling their existing home or their financing falls through, according to a survey of Redfin agents.

Homebuyers in America are getting cold feet. 

“One of my buyers almost canceled a contract because she accidentally flushed her engagement ring down the toilet during the home inspection,” said Manny Bermudez, a Redfin real estate agent in Phoenix. “The seller came home and both parties searched for the ring for two hours. The buyers never found it and took their bad luck as a sign to back out of the deal.”

While Bermudez’s story has a happy ending—his buyers ended up moving forward with the purchase after the sellers agreed to a long list of concessions—many buyers these days are leaving sellers at the altar. 

Roughly 56,000 U.S. home-purchase agreements were canceled in August, equal to 15.1% of homes that went under contract that month. That’s up from 14.3% a year earlier and marks the highest August rate in records dating back to 2017.

!function(){“use strict”;window.addEventListener(“message”,function(a){if(void 0!==a.data[“datawrapper-height”]){var e=document.querySelectorAll(“iframe”);for(var t in a.data[“datawrapper-height”])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data[“datawrapper-height”][t]+”px”;r.style.height=d}}})}();


This is based on a Redfin analysis of MLS pending-sales data. The data are seasonal, which is why we compare this August to past Augusts. Please note that homes that fell out of contract during a given month didn’t necessarily go under contract the same month. For example, a home that fell out of contract in August could have gone under contract in July.

Home purchases are falling through more frequently because buyers and sellers oftentimes aren’t on the same page and aren’t willing to compromise.

Buyers are skittish and selective due to high prices, high mortgage rates and economic uncertainty. They’re asking sellers for all sorts of repairs, price reductions and other concessions because a) it’s expensive to buy a home and b) it’s a buyer’s market, meaning buyers hold the negotiating power. There are roughly 500,000 more sellers than buyers in the market, which empowers buyers to negotiate because they have options. 

Many sellers are still operating like it’s 2021, assuming their home will sell as-is for top dollar. Some are having a hard time adjusting to the reality that it’s no longer a seller’s market because it seems like just yesterday that homes were getting dozens of offers and fetching tens of thousands of dollars over the asking price. Sellers who purchased their homes during the peak of the pandemic homebuying frenzy are also often unwilling to negotiate because they need to sell their homes for a certain price to avoid taking a loss. 

Deals typically fall apart during the inspection period. Buyers will use the inspection contingency to back out of a deal if the seller doesn’t concede to their repair requests, a better home comes up for sale, or they’re simply suffering from a case of buyer’s remorse. This marks a reversal from the pandemic homebuying frenzy, when buyers were waiving every contingency just to have a chance at winning a bidding war.

Inspection and Repair Issues Are a Top Driver of Home-Purchase Cancellations 

Redfin in September surveyed 443 of its real estate agents who have dealt with deal cancellations in the past three months. 

Of those 443 agents, 70.4% said home inspection or repair issues caused deals to fall through. The second most common response was buyer financing falling through (27.8%), followed by a buyer’s inability to sell their current home (21%), a change in the buyer’s financial situation (14.9%), a buyer finding a different property they liked better (12.9%) and concerns about the economic climate (12.2%).

!function(){“use strict”;window.addEventListener(“message”,function(a){if(void 0!==a.data[“datawrapper-height”]){var e=document.querySelectorAll(“iframe”);for(var t in a.data[“datawrapper-height”])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data[“datawrapper-height”][t]+”px”;r.style.height=d}}})}();

A lot of buyers are eyeing homes at lower price points these days because the cost of homeownership has surged in recent years. That could be contributing to the rise in contract cancellations because lower-priced homes are more likely to have issues arise during inspections.

Buyers often back out of deals when sellers aren’t willing to cover repairs that come up during the inspection, but sometimes they back out even when the seller does everything they ask.

“I had a listing where the buyers requested nearly $15,000 in pool repairs,” said Kevin Alford, a Redfin real estate agent in Oklahoma City, OK. “My sellers went above and beyond, completing the work, paying out of pocket to make sure everything was perfect. But even after the pool was repaired, the buyers failed to close on the scheduled date without notice. The deal ultimately fell through, and it was heartbreaking for the sellers.”

Many agents also cited issues with condos. High HOA dues and hefty special assessments—both of which have become increasingly common—can give buyers cold feet. Deals can also fall apart if a condo buyer is planning to use an FHA loan but isn’t aware that not all condo buildings are approved for FHA buyers.

Sometimes deals also fall apart because the seller gets cold feet; 11.5% of Redfin agents who have dealt with a contract cancellation in the past three months cite the seller backing out as a reason their deals fell through. It is more challenging for sellers to back out because they often don’t have contingencies, though some include a contingency that allows them to cancel if they don’t find a suitable home to move to. Both parties should be aware that they are entering a legal contract when they agree to buy/sell a home; buyers may have to forfeit their earnest money if they back out without a contingency.

Redfin Agents Offer Advice on How to Keep Deals Together

Tips for sellers:

• Do a pre-inspection so the buyer is aware of any issues upfront.
• If multiple buyers express interest while your home is actively listed, ask your agent to seek a back-up offer in case your first-choice buyer backs out.
• Be flexible—you may need to lower your asking price or do repairs to seal the deal in today’s market.
• Shorten the inspection period and/or negotiate a substantial enough (but still reasonable) sum of earnest money so that it’s more challenging for a buyer to walk away. Please note that these two may only work if you’re in a balanced market or a seller’s market; sellers who live in a buyer’s market have less leverage.

Tips for buyers:

• Get fully pre-approved for a mortgage before touring homes, and when you’re considering making an offer, discuss the monthly payment with your lender so there are no surprises. If possible, don’t make other large purchases or take out other loans during the homebuying process; it could hurt your credit, which may give lenders pause.
• Tour a home you’re considering buying more than once.
• Make sure you love a home before committing to purchase it. If you’re unsure of anything and time allows, sleep on it.
• Before agreeing to purchase a home, investigate if it was recently under contract and ask for previous inspection reports.
• Understand beforehand that issues will likely arise during the inspection; inspections are rarely perfect. 
• Get home-insurance quotes ahead of time so you know what you’re in for—insurance premiums have been rising.
• If you’re buying a condo, contact the condo association to get a copy of meeting minutes and read them to see if there have been any recent issues. Inquire about HOA dues and special assessments.

Florida Has One of the Highest Rates of Home-Purchase Cancellations

In Atlanta, 1,532 home-purchase agreements were canceled in August, equal to 21% of homes that went under contract that month—the highest percentage among the metros in this analysis. Next came Jacksonville, FL (20.5%), Orlando, FL (20.2%), Tampa, FL (19.4%) and Las Vegas (19.4%). Redfin analyzed the 50 most populous metro areas and included in this analysis the 47 with sufficient data.

“I worked with one seller who received 78 repair requests from a buyer following the inspection, and that was after the seller had already agreed to lower their $375,000 asking price by $25,000 because the house needed some improvements,” said Dawn Liedtke, a Redfin real estate agent in Tampa. “The buyer came back and said they would handle the cost of the repairs, but only if the seller was willing to lower the price by another $100,000. The deal didn’t work out.”

Florida has been building more homes than any other state but Texas, prompting some buyers to back out of deals because they’re confident they will be able to find a different home that works better for them. Some buyers in the Sunshine State are also getting cold feet due to increasing natural disasters and soaring insurance and HOA fees. 

Home purchases were least likely to fall through in Nassau County, NY (4.5%), San Francisco (5.9%), San Jose, CA (6.9%), Montgomery County, PA (8.8%) and Oakland, CA (9%).

San Jose Has Seen the Biggest Uptick in Cancellations 

While San Jose has one of the lowest cancellation rates, it has seen the largest uptick from last year, with its cancellation rate rising to 6.9% in August from 1.6% a year earlier (+5.3 ppts). Next came Virginia Beach, VA (+4.2 ppts), Oakland (+4.1 ppts), Houston (+3.9 ppts) and Washington, D.C. (+3.5 ppts). Cancellations rose year over year in 33 metro areas. 

Cancellations fell from a year earlier in 14 metros, with the biggest drops in Portland, OR (-1.8 ppts), Riverside, CA (-1.6 ppts), Miami (-1.5 ppts), Anaheim, CA (-1.3 ppts) and Denver (-1.2 ppts).

Metro-Level Summary: August 2025

The post Homebuyers Are Canceling Deals at a Record Rate. Here’s Why. appeared first on Redfin Real Estate News.