Home-purchase cancellations are on the rise, with January recording more than 41,000 home deals that fell through. According to real estate marketing platform Redfin, this makes up 14.3% of U.S. home contracts—higher than last year and the highest for this time of year since 2017. There are several reasons this could be occurring. For instance, housing inventory growth has given buyers more choices, causing some to back out in hopes of finding better deals. Additionally, high mortgage rates and uncertain economic conditions could be giving some buyers second thoughts.
Cancellations vary from metro to metro. Atlanta saw the most canceled deals in January, with 19.8% of total home sales falling through. This was followed by Orlando, Fla., Las Vegas, and Houston, where 18.2%, 17.9%, and 17.8% of deals were canceled, respectively.
Home-purchase agreements are getting canceled at the lowest rate in the Bay Area. San Francisco has the lowest share, with 4.1% of deals following through, followed by San Jose, CA (5.9%). Rounding out the top five are Nassau County NY (6.8%%), Oakland, CA (8.4%), Seattle (8.7%). All of those markets are currently tilting toward sellers, with a limited amount of supply on the market, meaning buyers typically don’t have many other choices if they back out of a deal. Read more