Despite widespread price reductions and slightly lower borrowing costs, U.S. homebuyers are still canceling purchases at a record rate, according to recent data by Redfin.
In August, Americans canceled roughly 56,000 home purchases, the equivalent of 15.1 percent of all homes that went under contract that month across the nation, up from 14.3 percent a year earlier. It was the highest August percentage since the real estate brokerage started tracking the data in 2017.
Why Are So Many Buyers Dropping Out of Home Purchases?
The main reason why buyers are getting cold feet is likely that they are not on the same page with sellers.
The U.S. housing market has shifted in favor of buyers in recent months, for the first time in years. As they were being kept to the sidelines by ongoing affordability issues, including rising prices and high borrowing costs, inventory has risen, giving them more options and more negotiating power.
In August there were over 2.1 million homes for sale across the country, more than at any time in the past five years. In the same month, sellers in the U.S. housing market outnumbered buyers by more than 500,000, according to Redfin.
Buyers, however, are not in the same rush to snatch away expensive homes as they were during the pandemic, though many sellers still expect to fetch the same prices for their properties now. Buyers can now afford to be picky, and back off if they think a property is priced too high. In August, the median sale price of a typical U.S. home was $439,198, according to Redfin.
They are willing to ask sellers to drop their asking prices, pay for necessary repairs, or offer other concessions—or withdraw from a deal if these conditions are not met.
But for sellers who bought their homes at the peak of the pandemic home-buying frenzy, when prices surged by over 30 percent, lowering prices now might often mean taking a loss.
There are also other reasons why some buyers might cancel a purchase. According to Redfin’s agents, buyers often back out of a pending purchase after inspections reveal issues with the property. Alternatively, they may have trouble selling their own home, or their financing falls through.
“One of my buyers almost canceled a contract because she accidentally flushed her engagement ring down the toilet during the home inspection,” said Manny Bermudez, a Redfin real estate agent in Phoenix. “The seller came home and both parties searched for the ring for two hours. The buyers never found it and took their bad luck as a sign to back out of the deal.”
Eventually, Bermudez’ buyers went through with the purchases after the seller agreed to a long list of concessions—bad luck or not.
What Does This Mean for the U.S. Housing Market?
The U.S. housing market has never looked better for buyers, and the high rates of cancellations across the country last month prove that they have the upper hand over sellers. But the rise in homebuyers getting cold feet could also signal a deeper malaise among Americans, many of whom are worried about the direction the U.S. economy is taking.
According to Fannie Mae’s September 2025 Home Purchase Sentiment Index, which uses data from the National Housing Survey, 67 percent of Americans believes the country’s economy is on the “wrong track,” and an even higher number—73 percent—say it is a bad time to buy a home.
By comparison, sellers were more optimistic. Despite supply headwinds, 57 percent said they believe it is now a good time to sell their home, with 41 percent disagreeing. That might have something to do with the fact that a majority of Americans think that home prices will keep on rising: 40 percent of survey participants said they think home prices will continue going up in the next 12 months, while 22 percent think they will fall, and 38 percent believe they will stay the same.
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