US Existing-Home Sale Contract Cancellations Near Three-Year High in July

Redfin reported that 14% of US home-sale agreements that went under contract in July were canceled, the highest share in nearly three years on a seasonally adjusted basis. The rate increased from 13.7% in June.

Despite reaching a nearly three-year high, the increase remains small, Redfin noted. The share of US homebuying agreements that have fallen through has ranged from about 13–14% over the past four years, though cancellations remain more common than during the hot seller’s market of 2020–22.

Redfin attributed the increase in cancellations partly to greater buyer leverage. The number of US homebuyers fell to a record low in July, while sellers outnumbered buyers by a near-record 51%, giving buyers more options and making them more likely to walk away following inspection issues, low appraisals, or unsuccessful concession negotiations.

Affordability challenges are also making buyers more cautious, Redfin said. Home prices remain high and mortgage rates elevated, leaving many buyers with limited financial flexibility.