Why Are Home Purchase Deals Falling Through? Key Reasons and Metro Data (2025)

In August 2025, 15.1% of U.S. home-purchase agreements were canceled, the highest rate for that month since 2017. This increase from 14.3% a year prior highlights a market where buyers and sellers are frequently misaligned. High prices, elevated mortgage rates, and economic uncertainty have created a dynamic where buyers are highly selective and sellers are often slow to adjust from the peak-market mindset of 2021. The result is a rise in deals falling apart, primarily during the critical inspection period.

What Are the Most Common Reasons Deals Fall Through?

Based on a September 2025 survey of 443 real estate agents who recently dealt with cancellations, several key issues derail transactions. The data reveals the primary pain points for buyers and sellers.

The home inspection contingency—a clause in a purchase agreement that allows a buyer to have the property professionally inspected and potentially renegotiate or withdraw based on the findings—is the most common breaking point. Buyers, empowered by having more options (roughly 500,000 more sellers than buyers in the market), are making significant repair requests. When sellers refuse, buyers often walk away. This contrasts sharply with the pandemic-era market, where buyers frequently waived contingencies to win bidding wars.

How Does Buyer and Seller Psychology Impact Deals?

The current market friction often stems from a clash of expectations. Many sellers still expect their homes to sell quickly and for top dollar, as was common in 2021. However, buyers today are skittish and selective. They are acutely aware of the high cost of homeownership and are using their negotiating power to ask for concessions, including price reductions and repairs.

Conversely, some sellers who purchased at the market's peak may be unwilling to negotiate because selling for less than their purchase price would mean taking a loss. In some cases, sellers also get cold feet; 11.5% of agents cited the seller backing out as a reason for cancellation, sometimes due to a contingency that allows them to cancel if they cannot find a new home.

Which U.S. Metros Have the Highest and Lowest Cancellation Rates?

Cancellation rates vary significantly by location, reflecting local market dynamics. In August 2025, the following metros had the highest and lowest rates of canceled purchase agreements.

Metros with Highest Cancellation Rates:

• Atlanta, GA: 21.0%
• Jacksonville, FL: 20.5%
• Orlando, FL: 20.2%
• Tampa, FL: 19.4%
• Las Vegas, NV: 19.4%

Metros with Lowest Cancellation Rates:

• Nassau County, NY: 4.5%
• San Francisco, CA: 5.9%
• San Jose, CA: 6.9%
• Montgomery County, PA: 8.8%
• Oakland, CA: 9.0%

Florida's high cancellation rates can be attributed to rapid new construction, which gives buyers confidence that they can easily find another property. Factors like rising insurance costs, HOA fees (regular payments made to a Homeowners' Association for maintaining common areas and amenities), and concerns about natural disasters also contribute to buyer hesitation in the state.

What Practical Steps Can Buyers and Sellers Take?

For both parties, understanding the common pitfalls is the first step toward a successful closing.

For Sellers:

• Price realistically from the start. Based on our experience assessment, overpricing a home in this market can lead to extended time on the market and increased likelihood of a canceled deal later.
• Be prepared to negotiate on repairs. Expect that the buyer's inspection will uncover issues. Decide in advance what repairs you are willing to complete or pay for.
• Understand your market. Acknowledging that it is no longer a seller's market can set realistic expectations for the negotiation process.

For Buyers:

• Get pre-approved, not just pre-qualified. A solid mortgage pre-approval from a reputable lender reduces the chance of your financing falling through.
• Be reasonable with repair requests. While an inspection contingency is a vital protection, demanding every minor repair be fixed may cause a seller to walk away.
• Conduct thorough due diligence. For condos, review the HOA's financial health and rules to avoid surprises about special assessments or FHA loan eligibility.

The key to a successful real estate transaction in the current climate is flexibility and a clear understanding of market realities from both sides of the deal. By anticipating the common reasons agreements fall apart, buyers and sellers can better navigate the process and avoid becoming another cancellation statistic.