Home purchase cancellations are no longer climbing nationally as buyers and sellers adjust to a housing market defined by higher rates, elevated inventory, and slower — but stabilizing — demand.
A new report from Redfin found that just over 47,000 U.S. home-sale agreements were canceled in April, representing 13.4% of homes that went under contract during the month. That was down slightly from March and tied with January for the lowest cancellation rate since September 2024.
While cancellations remain elevated compared to the ultra-competitive seller’s market of 2020 through early 2022, the latest data suggest buyers may be gaining confidence as housing market volatility begins to normalize.
Contract cancellations inched down this spring as homebuyers and sellers gain a clearer sense of housing market conditions after several years of volatility, according to the report.
The brokerage noted that sellers are becoming more willing to negotiate on price and concessions to keep transactions together, while buyers are increasingly acclimating to higher monthly housing payments. Pending home sales have also been ticking higher in recent months.
Mortgage rates may have also played a role. The average 30-year fixed mortgage rate declined for three consecutive weeks in April before rising again in May.
For mortgage professionals, the report points to a market that remains highly sensitive to affordability and consumer confidence, but one where transaction fallout may finally be stabilizing after several turbulent years.
Buyer’s Markets Continue To See Higher Fallout Rates
The highest cancellation rates continue to be concentrated in Sun Belt metros where inventory has expanded significantly, and buyers have gained negotiating leverage.
Atlanta posted the highest cancellation share among the nation’s 50 largest metros at 19.3%, followed by San Antonio (18.9%), Fort Worth (17.6%), Tampa (17.4%) and Phoenix (17%).
Redfin said these markets remain heavily tilted toward buyers because of excess supply. In Atlanta, for example, there are roughly 70% more sellers than buyers, giving consumers more freedom to walk away from deals during inspections or financing contingencies.
Some buyers are also pulling out because of broader economic uncertainty, including concerns surrounding job security and geopolitical tensions tied to the Iran war.
“We’re seeing some buyers cancel purchase agreements, but no more than usual, and when buyers do back out, it’s typically because of post-inspection repair costs and appraisals,” said Timothy Hourigan, a Redfin Premier agent in Syracuse, NY.
“Buyers are generally committed because supply is tight enough that they’re excited to find a home they love in their price range,” Hourigan added. “In places like Syracuse, where homes are affordable compared to nearby big cities, bidding wars are more common than backing out.”
Seller’s Markets Showing Much Lower Cancellation Rates
By contrast, cancellation rates remain extremely low in markets where inventory is still constrained, and competition remains intense.
San Francisco posted the lowest cancellation rate in April at just 2.8%, followed by Nassau County, N.Y. (3.3%), San Jose (6.8%), Montgomery County, Pa. (7.5%), and New York City (7.5%).
Redfin attributed San Francisco’s strength in part to renewed demand fueled by the region’s AI-driven economic growth, which has helped reignite competition for homes.
The report also showed that cancellations fell fastest month over month in Orlando, dropping from 18.5% to 16.8%. New Brunswick, N.J., and San Francisco also saw notable declines.
Meanwhile, Detroit, Nashville, and Houston posted the largest monthly increases in cancellations.
For lenders and originators, the stabilization in fallout rates could signal that buyers are becoming more serious and financially prepared before entering contracts, even as affordability pressures and rate volatility continue to weigh on overall housing activity.
