The rising home sale cancellations across the United States are raising alarms in the property market. According to Redfin, 15.6% of purchase agreements were canceled in July 2025, meaning nearly 1 in 6 homes under contract never reached closing.
Compared to the same time last year, this is a notable increase from 12.3% in July 2024. Analysts say this signals serious challenges for buyers, sellers, and real estate professionals alike.
Tight Financing Triggers Deal Failures
High mortgage rates continue to erode buyer confidence. With rates now at 6.9%, many pre-approved buyers are being disqualified during final underwriting. In Atlanta and Las Vegas, over 20% of signed contracts were terminated due to financing issues.
Real estate agents report more buyers backing out after realizing their monthly payments would exceed initial expectations. Down payment requirements have also increased, causing many deals to stall.
The trend of rising home sale cancellations is pushing sellers to reconsider price strategies and offer better incentives.
Appraisals Are Falling Short—Again
In red-hot markets like Phoenix and Tampa, homes are still being listed high, but appraisals are not keeping up. Roughly 1 in 5 appraisals fail to match the agreed sale price. When that happens, buyers are forced to either pay the difference or walk away.
In some cases, sellers refuse to adjust their pricing, leading to immediate cancellation. The rising home sale cancellations are now more common in neighborhoods that saw the fastest appreciation over the past 2 years.
Economic Uncertainty Drives Buyer Retreat
Outside of the real estate sector, broader economic concerns are impacting buyer behavior. Inflation is still above 4.3%, layoffs continue in tech and finance, and recession talks persist.
In cities like San Jose, agents say buyers are pausing large financial decisions, including home purchases. A recent survey by Mortgage Professional America revealed that 28% of buyers feel less confident about their financial stability compared to three months ago.
With all these factors at play, rising home sale cancellations could continue into Q3 and Q4 unless conditions stabilize.
Leave a Reply