Record Number Of Pending Home Sales Fall Through – NMP Skip to main content

Record Number Of Pending Home Sales Fall Through

Mar 03, 2025
Pending Home Sales

14.3% of homes under contract failed to close, Redfin data shows

A growing number of U.S. home sales are being canceled, with the highest rate of terminations for this time of year on record. According to a recent analysis by Redfin, 14.3% of homes that went under contract in January failed to close, marking an increase from 13.4% a year earlier.

Several metro areas are experiencing particularly high rates of cancellations, notably Atlanta, Las Vegas, Houston, and parts of Florida, where housing supply has been accumulating. Los Angeles has also seen a significant rise in failed transactions, largely attributed to January’s devastating wildfires.

Market Conditions Favor Buyers

The increase in cancellations comes as the housing market shifts in "buyers’ favor," influenced by rising inventory and declining demand. Housing supply has climbed to its highest level since 2020, providing prospective buyers with more choices. Meanwhile, pending home sales in January fell to their lowest level on record outside of the early pandemic months.

Economic uncertainty is also contributing to buyer hesitancy. Reports from Redfin agents indicate that concerns about tariffs, layoffs, and federal policy changes have led some buyers—and even some sellers—to back out of deals. Additionally, affordability remains a challenge; mortgage rates averaged 6.96% in January, an eight-month high, while home prices continued to rise, up 4.1% year over year.

“I’m seeing more homebuyers back out of deals than usual, and I’m hearing the same from other agents and mortgage lenders in the area,” said Sam Brinton, a Redfin Premier agent in Salt Lake City. “Some buyers are getting cold feet with everything going on in the world. But even with more cancellations, there are also more buyers out there in general. The nice homes in desirable locations are selling quickly, and those buyers are less likely to cancel.”

In response to increased cancellations, some Redfin agents are advising buyers to monitor properties they previously bid on. “It’s worth checking in with the listing agent about a week after the house goes under contract,” said Alison Williams, a Redfin Premier agent in Sacramento. “Twice since the start of the year, I’ve found out the original buyer canceled the contract, and my clients were able to get their offers accepted before the home went back on the market.”

Regional Disparities in Cancellations

The highest rates of contract terminations have been observed in the South. Atlanta leads with 19.8% of pending sales falling through, followed by Orlando (18.2%), Las Vegas (17.9%), Houston (17.8%), and Jacksonville (17.8%).

Two of the top five metro areas with the highest cancellation rates are in Florida. The state’s housing market has been cooling, driven by the increasing frequency of natural disasters and soaring home insurance and HOA fees. Rising inventory in Florida has also given buyers more flexibility, leading some to walk away from deals during the inspection period if they find a better option.

In contrast, cancellations remain relatively low in markets with constrained supply. San Francisco has the lowest share of terminated contracts at 4.1%, followed by San Jose (5.9%), Nassau County, NY (6.8%), Oakland (8.4%), and Seattle (8.7%). In these areas, buyers often have fewer alternative options if they choose to back out of a purchase.

Los Angeles Cancellations Surge Amid Wildfires

Los Angeles has experienced the most significant year-over-year increase in cancellations among major metros, with 15.9% of pending sales falling through in January, up from 13.2% a year earlier. The surge is likely linked to the recent Palisades and Eaton wildfires, which destroyed thousands of homes and disrupted the market.

Detroit saw the largest year-over-year jump in cancellations, rising from 13.1% in January 2024 to 17.4% in January 2025.

About the author
Kathryn Fitzpatrick is an associate editor at NMP.
Published
Mar 03, 2025
Jobs Report Comes In Weak After Mortgage Rates Surge

Employers added just 29,000 jobs in September, sending Treasury yields lower and offering a potential counterweight to the recent rise in mortgage rates

Oct 02, 2026
Price Cuts Hit Four-Year High As Mortgage Rates Top 7%

More than one in five listings took a price cut in September, but pending sales still posted their sharpest annual decline since March 2025

Oct 01, 2026
Serious Mortgage Delinquencies Rise 19% After Five Months Of Improvement

ICE data shows 574,000 mortgages were at least 90 days past due in August, while early-stage delinquencies remained below year-ago levels

Sep 29, 2026
Smaller Down Payments Give Buyers More Room, But Rates Limit The Savings

The typical down payment fell 9% from a year ago, while shifting market conditions are giving originators different affordability conversations across the country

Sep 25, 2026
Mortgage Rates Break 7% Just As Builders Find A Way To Move Buyers

New-home sales rose 6.4% in August as builders cut prices, offered incentives, and sold more lower-priced homes. Now mortgage rates are moving against buyers again

Sep 25, 2026
Borrowers Want Digital Closings, But Some Originators Remain Hesitant

ServiceLink finds 45% of surveyed LOs cite borrower reluctance as a barrier, even though most recent buyers say digital options would influence their choice of mortgage provider

Sep 23, 2026