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Roughly 15.1% of U.S. home-purchase agreements were canceled in October, a noticeable increase from 14.3% the previous year. This trend, based on an analysis of Multiple Listing Service (MLS) pending-sales data, highlights a significant shift in buyer behavior. The cancellation rate is highest in markets like San Antonio, Texas, and lowest in competitive areas like Nassau County, New York. The primary drivers include high housing costs, economic uncertainty, and a buyer's market that provides more options and negotiating power.
Several key factors are contributing to the elevated rate of deal fall-throughs. High mortgage rates and overall economic uncertainty are causing some buyers to get cold feet, reassessing their financial commitment. Furthermore, in many parts of the country, it has become a buyer's market. This means the supply of homes for sale exceeds buyer demand, giving purchasers significant leverage. They have the flexibility to take their time and, if an inspection reveals issues or a seller is unwilling to negotiate, they are confident they can find another suitable property.
As one real estate professional noted based on experience, "Buyers know they have options, so if a seller isn’t willing to address a maintenance issue, the buyer will walk away. A lot of sellers are having to adjust their expectations."
The metropolitan areas with the highest cancellation rates are concentrated in states that have seen aggressive new home construction. San Antonio leads the nation, with over one in five (21%) pending sales falling through in October. It is followed by:
In these regions, the abundance of listings empowers buyers to back out of deals if they find a better opportunity. In Florida, additional concerns like increasing natural disasters and rising insurance premiums are also contributing factors.
On the opposite end of the spectrum, the most competitive housing markets have the lowest cancellation rates. Nassau County, NY, had the nation's lowest rate at just 4.4% in October. This is followed by:
In these areas, housing supply remains tight relative to demand. Markets like the San Francisco Bay Area have experienced a resurgence in competition, partly driven by an AI industry boom, leaving buyers with less room to negotiate and a stronger incentive to close a deal once it is under contract.
For sellers, this environment underscores the importance of strategic pricing and preparedness. Pricing a home reasonably from the start is critical to attracting serious buyers and avoiding a prolonged listing period that can lead to buyer hesitation. Being responsive to inspection findings and willing to negotiate on repairs can also help secure a successful closing.
For buyers, the current climate offers a distinct advantage in many markets. The ability to negotiate on price and request repairs is stronger than it has been in recent years. However, this advantage is not universal; in highly competitive markets, buyers must still be prepared to act decisively.
The key takeaway is that local market conditions dictate strategy. Understanding whether you are in a buyer's or seller's market is essential for making informed decisions, whether you are looking to purchase a home or list one for sale.
