U.S. homebuyers canceled nearly 40,000 purchase contracts during December, a December record dating back to at least 2017.
U.S. homebuyers canceled nearly 40,000 purchase contracts during December, representing 16.3% of homes contracted in the month and a December record dating back to at least 2017.
In December 2024, 14.9 percent of all home purchase contracts were canceled.
Redfin’s analysis is based on MLS pending sales data, and some properties may have gone under contract in earlier months than December.
The news comes as the average 30-year fixed-rate mortgage rate hit a three-year low of 6.09% this week.
With the domestic market in the realm of a strong buyer’s market, the advantage of buyers over sellers is likely to result in more contract cancellations.
“Rising home prices and increasing inventory are making homebuyers more selective,” Chen Zhao, head of economic research at Redfin, said in a report. “The number of home sellers outnumbering buyers by a record margin means buyers in the market have options and are more likely to leave if they believe they can find a better, more affordable home.”
Redfin noted that it is not uncommon for buyers to use a contingency to back out of a deal after an inspection. Even if the reasons for withdrawal are completely different.
Atlanta had the highest housing contract cancellation rate in December at 22.5%, up from 19.6% in November, according to Redfin. In the southern market, the number of sellers currently exceeds the number of buyers by more than 80%.
After Atlanta, the top major metropolitan areas with contract cancellations last month included Jacksonville, Florida (20.6% of contracts canceled). San Antonio, Texas (20.6%); Cleveland, Ohio (20.2%); and Tampa, Florida (19.4%).
Forty-seven of the 50 most populous large cities in the United States had sufficient data to be included in the report.
Contract cancellations were least common in coastal hotspots like Nassau County, New York (3.8 percent contract cancellations). San Francisco, California (4.2%); San Jose, California (8.9%); and New York, New York (10.5 percent).
In fact, San Jose saw the largest year-over-year increase in contract cancellations, increasing by 6.8 percentage points, despite relatively low overall levels. The Bay Area cooled down in the years following the pandemic, but the economy recovered in late 2025 and is now considered to be in balance, Redfin noted.
The largest decrease in contract cancellations was in Detroit, Michigan (-8 percentage points). Warren, Michigan (-2.8 percentage points); Pittsburgh, Pennsylvania (2.3 percentage points); Los Angeles, California (-1.1 percentage points) and Nassau County, New York (-0.7 percentage points).
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