Home Purchase Cancellations Rose to 15.1% in August

Seattle, WA, October 7, 2025-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. 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.

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.

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.