US Home Purchase Cancellations Reach Highest August Level Since 2017

On Tuesday, Redfin reported that about 56,000 US home-purchase agreements were canceled in August, equal to 15.1% of homes that went under contract during the month. That share was up from 14.3% a year earlier and marked the highest August rate since records began in 2017.

Redfin said cancellations are rising because buyers and sellers are often unwilling to compromise. Buyers, facing high prices, elevated mortgage rates, and economic uncertainty, are becoming more selective. With roughly 500,000 more sellers than buyers, purchasers have leverage to negotiate repairs, price cuts, or other concessions.

Many sellers, meanwhile, are struggling to adjust to the post-pandemic market. Redfin noted that some “are still operating like it’s 2021,” expecting top-dollar offers and resisting discounts, while others who bought at peak prices hesitate to sell at a loss.

Of the 443 agents surveyed by Redfin, 70.4% said home inspection or repair issues caused deals to fall through. The second most common reason was buyer financing collapsing (27.8%), followed by a buyer’s inability to sell their current home (21%), a change in the buyer’s financial situation (14.9%), a buyer finding a different property they preferred (12.9%), and concerns about the economic climate (12.2%).