Home purchase cancellations in the U.S. reached their highest July level on record, with 15.3% of deals falling through, according to Redfin. Roughly 58,000 agreements were canceled last month, reflecting how high prices, steep mortgage rates, and economic uncertainty are making buyers hesitant. Cancellations were most common in Texas and Florida, where new construction and insurance costs are reshaping the housing landscape.
Why Deals Are Falling Through
Redfin data show that buyers now hold more negotiating power, as higher housing supply allows them to walk away if a better option arises or if inspections reveal issues. Many back out during the inspection period or simply get cold feet. Bonnie Phillips, a Redfin Premier agent in Cleveland, noted that FHA and VA loan buyers tend to cancel more often, with common reasons ranging from high standards to unexpected advice from friends or neighbors. “I recently had an older first-time buyer back out the week before closing, even though there were no problems with the house,” Phillips said.
Regional Trends
Texas and Florida led the nation in cancellations. San Antonio topped the list with 22.7% of deals falling through, followed by Fort Lauderdale (21.3%), Jacksonville (19.9%), Atlanta (19.7%), and Tampa (19.5%). Florida’s cancellations are further fueled by natural disaster risks, surging insurance premiums, and rising homeowners’ association fees. In contrast, cancellations were least common in Nassau County, NY (5.1%), Montgomery County, PA (8.2%), Milwaukee (8.3%), New York City (9.5%), and Seattle (10.2%).
Biggest Shifts
Virginia Beach saw the largest year-over-year jump in cancellations, rising from 12.5% in July 2024 to 16.1% this year. Newark (+3.3 percentage points), Baltimore (+3 points), San Antonio (+2.8 points), and Houston (+2.8 points) also posted significant increases. These markets often have higher shares of VA loan borrowers, who may be more prone to walking away. Conversely, 11 metros saw declines in cancellations, led by Phoenix (-2.4 points), Orlando (-1.4 points), Tampa (-1.3 points), Sacramento (-1.3 points), and Philadelphia (-1.2 points).
Outlook
Though cancellations hit a record in July, mortgage rates have recently edged lower, which could lure buyers back into the market. At the same time, supply is beginning to tighten, which may increase buyer urgency in coming months. For now, however, uncertainty remains high, leaving many buyers cautious and sellers facing tougher negotiations.