As Active Inventory Grows, More Buyers Back Out of Home Sales

In June, 57,000 home-sale agreements were cancelled nationwide, equating to approximately 14.9% of homes that were under contract during this time. Not only is this rate up from the 13.9% a year ago at this time, but it is also the highest share of cancellations in June since 2017, according to housing market platform Redfin.

Cancellations were observed across the U.S., but Sun Belt metros saw the highest concentration of cancellations. In Jacksonville, Fla., 21.4% of home-purchase agreements were cancelled, followed by Las Vegas and Atlanta, which recorded 19.7% and 19.6% of pending sales cancellations, respectively.

Some of these cancellations were caused by buyers changing their minds amid financial hardship, but Redfin suggests that many were simply the result of buyers shopping around and finding a house that more closely aligned with their wants and needs.

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.