Approximately 40,000 U.
S. home-purchase agreements were canceled in December 2025, representing 16.3% of homes that went under contract that month. This figure marks the highest December cancellation rate recorded since 2017, according to a new report from the real estate brokerage Redfin. The rate increased from 14.9% a year earlier, based on Redfin’s analysis of MLS pending-sales data, which compares seasonal data from past Decembers.
Chen Zhao, head of economics research at Redfin, noted that “high housing costs and rising inventory have made homebuyers more selective.” Zhao added, “Home sellers outnumber buyers by a record margin, meaning the buyers who are in the market have options and may walk away if they believe they can find a better or more affordable home.” Buyers often utilize inspection contingencies to back out of deals, with reasons ranging from structural issues identified during inspections to concerns about mortgage payments.
Redfin economists anticipate a gentle improvement in affordability by 2026, driven by an expected rise in wages that outpaces housing cost increases. This outlook follows recent declines in mortgage payments due to falling mortgage rates and easing price growth.
Among the metros analyzed by Redfin, Atlanta recorded the highest rate of purchase cancellations, with over one in five (22.5%) pending home sales falling through in December. This represents an increase from 19.6% in November and has positioned Atlanta as a strong buyer’s market where sellers significantly outnumber buyers. Other metros with high cancellation rates included Jacksonville, FL (20.6%), San Antonio (20.6%), Cleveland (20.2%), and Tampa (19.4%). Conversely, cancellations were least common in Nassau County, NY (3.8%), San Francisco (4.2%), San Jose, CA (8.9%), and New York (10.5%).
The Bay Area experienced some of the largest annual increases in home purchase cancellations. San Jose, CA, saw the most significant rise, increasing by 6.8 percentage points to 8.9% in December. This was followed by Oakland, CA (up 6.3 percentage points to 11.3%), Sacramento, CA (up 4.7 percentage points to 17.9%), Atlanta (up 4.4 percentage points to 22.5%), and Las Vegas (up 3.5 percentage points to 19%). Alison Williams, a Redfin Premier real estate agent in Sacramento, CA, commented, “Buyers have options and aren’t shy about negotiating to find the right home. Cost is a major barrier right now, so if the seller hasn’t fixed maintenance issues or the home is priced too high, the buyer may back out.” The Bay Area market has seen significant fluctuations, moving from a cooldown in 2022 to a hot market in late 2025, and is now settling into more balanced conditions.
In contrast, contract cancellations decreased most notably in Detroit (-8 percentage points), Warren, MI (-2.8 percentage points), Pittsburgh (-2.3 percentage points), Los Angeles (-1.1 percentage points), and Nassau County, NY (-0.7 percentage points).
Redfin, a technology-driven real estate company and part of Rocket Companies (NYSE: RKT), aims to create an integrated homeownership platform. The company provides services from property search to closing, enabling clients to view homes, apply for loans with Rocket Mortgage, and work with local agents.
