Homebuyers are becoming skittish, with economic uncertainty and shifting market dynamics causing more deals to fall through at the last minute. This hesitation is showing up in the data, as buyers are increasingly walking away from agreements, even after going under contract.
According to new data from Redfin, home purchase cancellations reached their second-highest April rate on record, with 14.3% of pending sales falling through last month compared to 13.5% a year earlier.
Roughly 56,000 home-purchase agreements were canceled in April, marking the highest April cancellation rate since records began in 2017, with the exception of April 2020, during the pandemic, when pending sales fell through at a 14.9% rate.
For the most part, there’s a higher share of cancellations near the end of the year and a lower share in the spring, based on Redfin’s analysis of MLS pending-sales data.
The reason for cold feet? Economic and political uncertainty, like tariffs, layoffs and federal policy changes, Redfin agents reported.
The shift into a buyer’s market, leaving buyers more room to negotiate, mixed with high mortgage rates and home prices, is also causing buyers to change their minds, reports Redfin.
Regional patterns
Atlanta had the highest amount of canceled deals, with 20% of pending home sales falling through in April.
Florida dominated the list of metros with the highest cancellation rates, claiming five of the top 10 spots, with Orlando at 19.4%; Tampa at 19.1%; Miami and Fort Lauderdale at 18.9% and Jacksonville at 18.4%.
Also in the top 10 were Riverside, California, at 19.1%; Fort Worth, Texas, at 18.7%; Las Vegas at 18.6% and San Antonio at 18.2%.
With five of the top 10 spots in Florida and another two in Texas, it is worth noting that these two states have had more new construction than anywhere else in the country, giving buyers more options. For Florida specifically, buyers have more cause of worry when it comes to increasing natural disasters and rising costs of insurance and HOA fees, added Redfin.
Among the metros with the lowest cancellation rates were Nassau County, New York, with 4.8% of sales falling through in April.Â
This was followed by Boston with 8.1%; Montgomery County, Pennsylvania, at 8.1%; Minneapolis at 8.4%; New York at 8.7%; Milwaukee at 9.2%; Seattle at 9.8%; Newark, New Jersey, at 9.8%; Warren, Michigan, at 10.4%; and New Brunswick, New Jersey, at 10.5%.
Anaheim, California, experienced the largest year-over-year increase in cancellations, with a rise of 3.1% to 15.7%. Up next was Seattle, up 2.8%; Milwaukee, up 2.7%, and Los Angeles and Nashville, up 2.6%.
Redfin data showed 10 metros with a decline in cancellations, led by Detroit, down 3%; Portland, Oregon, down 1%; Cleveland down 0.6%; and West Palm Beach down 0.4%.
