Home purchases are getting canceled at a record rate: Redfin

Home sales are falling through at the highest rate in years, as record prices, elevated mortgage rates and economic uncertainty lead more buyers to walk away.

More than 15 percent of home purchases fell through last month, the highest July rate in records dating back to 2017, according to a new Redfin analysis.

Those failed sales amounted to roughly 58,000 canceled U.S. home purchase agreements last month, equal to about 15.3 percent of homes that went under contract in July. That's up from 14.5 percent a year ago and 12 percent before the pandemic.

Cancellations were most common in Texas and Florida, which are currently home to some of the slowest housing markets in the country.

San Antonio led the nation, with July cancellations equal to 22.7 percent of homes that went under contract during the month. Fort Lauderdale, Fla. (21.3 percent), Jacksonville, Fla. (19.9 percent) and Atlanta (19.7 percent) also made the top five.

The regional trends provide further evidence of a Sunbelt slowdown, where red-hot pandemic-era price growth has cooled, giving buyers more leverage. Part of the shift is because Florida and Texas have been building more homes than anywhere else in the country, boosting inventory.

And it's not just deals falling through — homes are also lingering on the market longer. The typical home that went under contract in July spent 43 days on the market, the longest span for any July since 2015, Redfin found.

In Sunshine State cities like West Palm Beach and Fort Lauderdale, homes are sitting for more than 90 days. In 2022, U.S. homes spent an average of just 24 days on the market.

The change reflects a broader swing in the housing market, with buyers gaining the upper hand in major cities across the country. Inventory has bounced back to pre-pandemic levels in some states, and more sellers are making concessions to get deals done.

That said, home purchases are still getting over the finish line at a high rate in several Northeast and Midwest metros where pockets of affordability remain.

Last month, home purchases were least likely to fall through in Nassau County, N.Y. (5.1 percent), Montgomery County, Pa. (8.2 percent) and Milwaukee (8.3 percent). New York City, Boston and Seattle were also below the national average, around 10 percent.

Mortgage rates have come down slightly in recent weeks to 6.58 percent from 6.75 percent in mid-July, but they'll likely have to fall further to unfreeze the housing market.

"Shark Tank's" Kevin O'Leary thinks 5.5 percent is the magic number that will get buyers off the sidelines.

But with the Federal Reserve taking a cautious approach to President Trump's tariffs, major rate relief is unlikely for the foreseeable future.

Redfin's latest findings were based on an analysis of MLS pending-sales data. It's worth noting that homes that fell out of contract during a given month didn’t necessarily go under contract the same month. A July cancellation may have gone under contract in June, for example.