A new Redfin report showed that roughly 40,000 U.S. home-purchase agreements were canceled in December 2025, equal to 16.3% of homes that went under contract that month. That’s up from 14.9% a year earlier and marks the highest December rate in records dating back to 2017.
Based on a Redfin analysis of seasonal MLS pending-sales data, homes that fell out of contract during a given month didn’t necessarily go under contract the same month. For example, a home that fell out of contract in December could have gone under contract in November.
“High housing costs and rising inventory have made homebuyers more selective,” said Chen Zhao, head of economics research at Redfin. “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 frequently back out of deals using the inspection contingency; they may cancel their purchase because a structural issue came up during the inspection, even if their primary reason for canceling is that they realized the mortgage payments are too expensive.
Over one in five (22.5%) pending home sales in Atlanta fell through in December—up from 19.6% in November and the highest share among the metros Redfin analyzed. Jacksonville, Florida (20.6%); San Antonio (20.6%); Cleveland (20.2%); and Tampa (19.4%) rounded out the top five. Redfin analyzed the 50 most populous metro areas and included in this analysis the 47 with sufficient data.
Cancellations were least common in Nassau County, New York (3.8%); San Francisco (4.2%); San Jose (8.9%) and New York (10.5%). Contract cancellations decreased the most in Detroit (-8 ppts); Warren, Michigan (-2.8 ppts); Pittsburgh (-2.3 ppts); Los Angeles (-1.1 ppts); and Nassau County, New York (-0.7 ppts).
