Home-Purchase Cancellations Continue to Grow

With more options to choose from, homebuyers are backing out of home sales at higher rates. According to recent data from real estate marketing platform Redfin, about 56,000 U.S. home purchases were canceled in August, the highest share for the month since 2017. Comparatively, cancellations have risen by 14.3% since August 2024.

Why are so many home purchases being canceled?

The main reason buyers are backing out of deals is due to the number of options available to them. Currently there are approximately 500,000 more sellers than homebuyers, meaning that buyers can be specific about what they want from a home.

One of the top drivers for home-purchase cancellations is repair and remodeling concerns. In a recent survey of 443 real estate agents who have dealt with deal cancellations in the past three months, 70.4% say home inspection or repair issues caused deals to fall through.

Financial concerns also accounted for many cancellations in the past three months. Of those surveyed, 27.8% say buyer financing falling through was the most common reason for home purchases being canceled. Additionally, 21% say buyers are canceling because of their inability to sell their current home, and 14.9% say cancellations are happening because of a change in the buyer’s financial situation.

Where are the most home purchases being canceled?

Atlanta saw the most home-purchase cancellations in August. In Atlanta, 1,532 home-purchase agreements were canceled, which is equal to 21% of all homes that went under contract during the month. Atlanta was followed by Jacksonville, Fla., where 20.5% of home-purchase agreements were canceled, and then Orlando, Fla., and Tampa, Fla., where a respective 20.2% and 19.4% of purchases were canceled.

Home-purchase cancellations have been growing over the past year

• Home-Purchase Cancellations Reach Record High: In July, home-purchase cancellations grew by 14.5% year-over-year. 
• More Buyers Walk Away as Home Cancellations Tick Up in April: In April, 56,000 U.S. home purchases were canceled.