Redfin reported that contract cancellations in April fell 0.1% to 47,000, the lowest level since September 2024.
Contract cancellations stabilized in April as both buyers and sellers adjusted to continued market headwinds, according to a new report from Redfin.
The number of cancellations decreased by 0.1% from the previous month to 13.4%, the lowest level since September 2024 and tied with January.
According to a Redfin report, cancellation rates reached a record high of 17% in 2020 and have generally hovered between 12% and 14% since then. However, this trend is higher than the pre-pandemic and early pandemic norm, when cancellations were typically less than 12%.
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“An increasing number of sellers are accepting the fact that it is a buyer’s market in most parts of the country and are willing to lower prices and make concessions to maintain business,” the report said. “Buyers may be getting used to higher home payments due to an increase in pending home sales and may be less likely to be shocked to back out when they see their final monthly payment.”
As with other market indicators, contract cancellations are highly regional, with homebuyers in Sunbelt regions most likely to back out of their contracts.
Atlanta (19.3%), San Antonio (18.9%), Fort Worth (17.6%), Tampa (17.4%) and Phoenix (17%) had the highest cancellation rates in April, according to the report. Overall, these cities are strong buyer’s markets, with home sellers outnumbering home buyers. In Atlanta, there are 70% more sellers than buyers, giving buyers the leverage to break deals without negotiation.
Meanwhile, contract cancellations are less common in California and some major markets in the Northeast, where homebuyers have fewer listing options. San Francisco had the lowest cancellation rate in April, barely reaching 3%.
“San Francisco’s housing market is booming thanks to its status as an AI hub,” the report says. “Next are Nassau County, New York (3.3 percent), San Jose County, California (6.8 percent), Montgomery County, Pennsylvania (7.5 percent), and New York State.[, New York] (7.5 percent)”
“San Francisco, Nassau County and Montgomery County are three of only seven sellers’ markets in the United States,” he added. “Buyers in these areas are less likely to leave because if they do, they may have a hard time finding another home to buy.”
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Redfin’s analysis is consistent with the latest pending home sales data from the National Association of Realtors, which found that existing home sales increased 1.4% month-over-month and 3.2% year-over-year in April.
Lawrence Yun
Dr. Lawrence Yun, NAR’s chief economist, said the increase was due to “cautious optimism” among homebuyers amid market headwinds, but warned that optimism would fade unless home price and wage growth trends correct.
“Unless supply increases significantly, home price growth could outpace wage growth and homeownership rates could decline further,” he said. “We need to focus all efforts on promoting housing supply.”
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