Redfin Reports Nearly 60,000 Home Purchases Were Called Off in August

Buyers frequently back out of deals when they find issues during the inspection, they have trouble selling their existing home or their financing falls through, according to a survey of Redfin agents

SEATTLE--(BUSINESS WIRE)-- Roughly 56,000 U.S. home-purchase agreements were canceled in August, equal to 15.1% of homes that went under contract that month, according to a new report from Redfin, the real estate brokerage powered by Rocket. That’s up from 14.3% a year earlier and marks the highest August rate in records dating back to 2017.

Home purchases are falling through more frequently because buyers and sellers oftentimes aren’t on the same page and aren’t willing to compromise.

Buyers are skittish and selective due to high prices, high mortgage rates and economic uncertainty. They’re asking sellers for all sorts of repairs, price reductions and other concessions because a) it’s expensive to buy a home and b) it’s a buyer’s market, meaning buyers hold the negotiating power. There are roughly 500,000 more sellers than buyers in the market, which empowers buyers to negotiate because they have options.

Many sellers are still operating like it’s 2021, assuming their home will sell as-is for top dollar. Some are having a hard time adjusting to the reality that it’s no longer a seller’s market because it seems like just yesterday that homes were getting dozens of offers and fetching tens of thousands of dollars over the asking price. Sellers who bought their homes during the peak of the pandemic homebuying frenzy are also often unwilling to negotiate because they need to sell their homes for a certain price to avoid taking a loss.

Deals typically fall apart during the inspection period. Buyers will use the inspection contingency to back out of a deal if the seller doesn’t concede to their repair requests, a better home comes up for sale, or they’re simply suffering from a case of buyer’s remorse. This marks a reversal from the pandemic homebuying frenzy, when buyers were waiving every contingency just to have a chance at winning a bidding war.

“One of my buyers almost canceled a contract because she accidentally flushed her engagement ring down the toilet during the home inspection,” said Manny Bermudez, a Redfin real estate agent in Phoenix. “The seller came home and both parties searched for the ring for two hours. The buyers never found it and took their bad luck as a sign to back out of the deal.”

Inspection and Repair Issues Are a Top Driver of Home-Purchase Cancellations

Redfin in September surveyed 443 of its real estate agents who have dealt with deal cancellations in the past three months.

Of those 443 agents, 70.4% said home inspection or repair issues caused deals to fall through. The second most common response was buyer financing falling through (27.8%), followed by a buyer’s inability to sell their current home (21%), a change in the buyer’s financial situation (14.9%), a buyer finding a different property they liked better (12.9%) and concerns about the economic climate (12.2%).

A lot of buyers are eyeing homes at lower price points these days because the cost of homeownership has surged in recent years. That could be contributing to the rise in contract cancellations because lower-priced homes are more likely to have issues arise during inspections.

Buyers often back out of deals when sellers aren’t willing to cover repairs that come up during the inspection, but sometimes they back out even when the seller does everything they ask.

“I had a listing where the buyers requested nearly $15,000 in pool repairs,” said Kevin Alford, a Redfin real estate agent in Oklahoma City, OK. “My sellers went above and beyond, completing the work, paying out of pocket to make sure everything was perfect. But even after the pool was repaired, the buyers failed to close on the scheduled date without notice. The deal ultimately fell through, and it was heartbreaking for the sellers.”

Many agents also cited issues with condos. High HOA dues and hefty special assessments—both of which have become increasingly common—can give buyers cold feet. Deals can also fall apart if a condo buyer is planning to use an FHA loan but isn’t aware that not all condo buildings are approved for FHA buyers.

Sometimes deals also fall apart because the seller gets cold feet; 11.5% of Redfin agents who have dealt with a contract cancellation in the past three months cite the seller backing out as a reason their deals fell through. It is more challenging for sellers to back out because they often don’t have contingencies, though some include a contingency that allows them to cancel if they don’t find a suitable home to move to. Both parties should be aware that they are entering a legal contract when they agree to buy/sell a home; buyers may have to forfeit their earnest money if they back out without a contingency.

Florida Has One of the Highest Rates of Home-Purchase Cancellations

In Atlanta, 1,532 home-purchase agreements were canceled in August, equal to 21% of homes that went under contract that month—the highest percentage among the metros in this analysis. Next came Jacksonville, FL (20.5%), Orlando, FL (20.2%), Tampa, FL (19.4%) and Las Vegas (19.4%). Redfin analyzed the 50 most populous metro areas and included in this analysis the 47 with sufficient data.

“I worked with one seller who received 78 repair requests from a buyer following the inspection, and that was after the seller had already agreed to lower their $375,000 asking price by $25,000 because the house needed some improvements,” said Dawn Liedtke, a Redfin real estate agent in Tampa. “The buyer came back and said they would handle the cost of the repairs, but only if the seller was willing to lower the price by another $100,000. The deal didn’t work out.”

Florida has been building more homes than any other state but Texas, prompting some buyers to back out of deals because they’re confident they will be able to find a different home that works better for them. Some buyers in the Sunshine State are also getting cold feet due to increasing natural disasters and soaring insurance and HOA fees.

Home purchases were least likely to fall through in Nassau County, NY (4.5%), San Francisco (5.9%), San Jose, CA (6.9%), Montgomery County, PA (8.8%) and Oakland, CA (9%).

San Jose Has Seen the Biggest Uptick in Cancellations

While San Jose has one of the lowest cancellation rates, it has seen the largest uptick from last year, with its cancellation rate rising to 6.9% in August from 1.6% a year earlier (+5.3 ppts). Next came Virginia Beach, VA (+4.2 ppts), Oakland (+4.1 ppts), Houston (+3.9 ppts) and Washington, D.C. (+3.5 ppts). Cancellations rose year over year in 33 metro areas.

Cancellations fell from a year earlier in 14 metros, with the biggest drops in Portland, OR (-1.8 ppts), Riverside, CA (-1.6 ppts), Miami (-1.5 ppts), Anaheim, CA (-1.3 ppts) and Denver (-1.2 ppts).

This is based on a Redfin analysis of MLS pending-sales data. The data are seasonal, which is why Redfin compares this August to past Augusts. Please note that homes that fell out of contract during a given month didn’t necessarily go under contract the same month.

To view the full report, including a chart and additional metro-level data, please visit:

https://www.redfin.com/news/home-purchase-cancellations-august-2025

About Redfin

Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.

You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.

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Contact Redfin Journalist Services:

Ally Forsell

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Source: Redfin