Home Sales Canceled Surge to Record High: What’s Behind the Drop?

The U.S. housing market is facing significant challenges as home sales decline and cancellations rise. Data indicates a growing imbalance between supply and demand, creating a more cautious environment for both buyers and sellers.

Rising Cancellations Signal Market Shift

More than 40,000 signed home purchase agreements were canceled in December, representing 16.3% of all homes under contract. This is an increase from 14.9% in December 2024 and the highest percentage of cancellations tracked by Redfin since 2017.

Did You Know? Redfin has been tracking home purchase agreement cancellations since 2017, and December 2025 represents the highest cancellation rate in that period.

Buyer Hesitancy and Inventory Levels

According to Chen Zhao, head of economics research at Redfin, “High housing costs and rising inventory have made homebuyers more selective.” The data shows a record margin of sellers outnumbering buyers, giving those still in the market more options and potentially leading them to reconsider purchases.

In December, there were approximately 631,535 more home sellers than buyers – a 47% difference. This gap is the largest recorded since 2013 and represents a 7.1 percentage point increase from the previous month.

Expert Insight: A significant imbalance between sellers and buyers suggests a potential shift in negotiating power, allowing buyers to be more discerning and potentially delaying purchases in anticipation of more favorable conditions.

Regional Variations and Future Outlook

The rate of cancellations varied significantly by region. Atlanta experienced the highest percentage at 22.5%, followed by Jacksonville and San Antonio (both at 20.6%), Cleveland (20.2%), and Tampa (19.4%). Conversely, cancellations were less frequent in the New York metropolitan area, San Francisco, and San Jose, California.

Overall pending sales dropped 9% in December, according to the National Association of Realtors. Given the high cancellation rate, closed sales in January and February are likely to be weak.

Ashley Rummage, a real estate agent from Raleigh, North Carolina, participating in a CNBC Housing Market Survey, stated, “I call 2025 the year of the seller, because I had so many sellers reach out.” She noted that sellers were motivated by economic fears, uncertainty surrounding the current administration, mortgage rates, and affordability concerns.

Frequently Asked Questions

What percentage of homes under contract were canceled in December?

16.3% of all homes that went under contract in December were canceled, according to Redfin.

How does the current seller-to-buyer ratio compare to previous years?

In December, there were roughly 47% more home sellers than buyers, representing a gap of 631,535. This is the largest gap in records dating back to 2013.

Which regions saw the highest cancellation rates in December?

Atlanta had the highest cancellation rate at 22.5%, followed by Jacksonville and San Antonio (both at 20.6%), Cleveland (20.2%), and Tampa (19.4%).

How might these trends influence your approach to buying or selling a home in the coming months?