Redfin data shows 14% of U.S. home-sale contracts were canceled in July 2026, the highest rate since late 2023, driven by a record-low buyer pool and elevated affordability pressures.
Source: Original report
Cancellation Rate Climbs to Its Highest Point Since Late 2023
One in seven U.S. home-purchase contracts collapsed in July 2026, according to new Redfin analysis of seasonally adjusted MLS data. The 14% cancellation rate represents the highest reading since November 2023 and edges up from 13.7% recorded a month earlier. While the increase is not dramatic in absolute terms — the rate has oscillated between roughly 13% and 14% for the past four years — it signals a meaningful shift in negotiating power toward buyers.
The backdrop is stark: the number of active homebuyers fell to a record low in July, while sellers outnumbered buyers by approximately 51% on a net basis nationwide. That imbalance gives prospective purchasers both the leverage and the confidence to exit contracts when conditions are not to their liking.
Why Deals Are Falling Apart
Several converging pressures are pushing cancellation rates higher. Home prices remain elevated, and mortgage rates have not retreated enough to meaningfully ease monthly payment burdens. That financial tightness leaves buyers with little margin for error — an unexpected repair estimate, a low appraisal or a modest change in loan terms can be enough to unwind a transaction.
Orlando-based Redfin agent Juan Castro described a pattern he sees frequently: buyers revisit their payment calculations with a lender, grow anxious about the commitment and pull out before even submitting an earnest money deposit. In other cases, a minor inspection finding becomes leverage for significant concessions — or a pretext for walking away altogether. "Buyers know they have options right now, so they're pushing harder in negotiations," Castro noted.
Economic uncertainty is also a factor, with some buyers simply changing their minds about major financial commitments amid a less predictable broader environment.
Where Cancellations Are Most Common
Southern metros, many of which surged in popularity during the pandemic era, now lead the country in deal fallout rates:
- Atlanta, GA: 19.8% of contracts canceled in July — the highest among the 50 largest U.S. metros tracked
- Houston, TX: 19.6%, with sellers outnumbering buyers by 130%
- San Antonio, TX: 18.7%
- Las Vegas, NV: 18.6%
- Orlando, FL: 18.2%
These markets share common characteristics: abundant inventory, a wave of newly constructed homes, higher living costs than during the pandemic boom and, in some cases, growing exposure to natural disaster risk. The combination has left many listings sitting without serious buyers.
Month-over-month increases were sharpest in Houston, where the cancellation rate jumped from 14.4% to 19.6%, and in Nashville, which rose from 12.6% to 14.3%.
Where Deals Are Most Likely to Close
At the other end of the spectrum, tight inventory keeps buyers committed in a handful of competitive markets:
- Nassau County, NY: Only 3.5% of contracts fell through — the lowest rate in the analysis
- San Francisco, CA: 4.1%, buoyed by strong tech-sector demand and AI-industry compensation
- San Jose, CA: 6.5%
- Montgomery County, PA: 7.3%
- Milwaukee, WI: 7.7%
Nassau County, Montgomery County and Milwaukee are among only six metros currently classified as seller's markets. In those places, limited supply means buyers have fewer alternatives and stronger incentive to hold deals together.
What Sellers and Buyers Can Do
The higher cancellation environment does not have to be a dead end for either party. Sellers can reduce the risk of a deal collapsing by commissioning a pre-listing inspection, which surfaces potential issues before a buyer's inspector does and allows the seller to either make repairs or enter negotiations with a clear picture of what credits or concessions may be needed.
A canceled contract can also represent an opening for other buyers. Homes that return to the market often face reduced competition the second time around, and sellers who have already been through one failed deal may be more flexible on terms. Buyers who lose out on a home they want can also ask their agent to establish a formal backup position, preserving their place in line without restarting the search from scratch.
Broader Context
The current cancellation rate, while elevated compared to the pandemic-era seller's market of 2020–2022, remains within a relatively narrow historical band. Redfin's analysis covers the 48 of the 50 most populous U.S. metros with sufficient data, and the figures are seasonally adjusted. Individual homes that fell out of contract in a given month may have originally gone under contract in a prior period.
