More homebuyers are willing to walk away from deals in 2026, especially in markets where they have more choices.
Redfin reported that 13.6% of homebuying deals made in May fell through nationwide. The share was unchanged from the prior month on a seasonally adjusted basis and had held steady for four straight months, according to Redfin.
That is not a panic signal by itself. But it does show that buyers are less likely to push through a transaction at any cost. High monthly payments, inspection findings, appraisal issues, insurance concerns and economic uncertainty can all make a buyer reconsider before closing.
Key takeaways
- Redfin reported that 13.6% of May homebuying deals fell through nationwide.
- The national cancellation rate had held steady for four consecutive months.
- Redfin said the share has mostly ranged between 13.4% and 14% during the last two years.
- Cancellations are more common in buyer-friendly markets where shoppers have more alternatives.
- Deals are less likely to fall apart in tighter seller’s markets.
- Sellers can reduce cancellation risk by pricing realistically and addressing issues early.
Why contracts fall through
A signed contract is a major step, but it is not the finish line.
NAR explains that pending contracts do not always become closed sales. Financing difficulties, home inspection problems and appraisal issues can change the path from contract to closing.
In 2026, buyers are also facing a bigger total-cost calculation. Mortgage rates, property taxes, insurance, HOA dues, repair costs and closing costs can push the monthly payment beyond what a buyer expected.
A buyer may love a house at the showing. The deal can look different after the loan estimate, inspection report, insurance quote or appraisal comes in.
Buyer leverage changes behavior
Contract cancellations often rise when buyers have more options.
Redfin said cancellations are most common in strong buyer’s markets, where buyers know they may be able to find another home if the current deal becomes too expensive or too risky. Redfin also noted that deals are least likely to fall apart in hotter seller’s markets, where buyers have fewer alternatives and may be more motivated to keep a transaction alive.
That difference matters for sellers. In a tight market, buyers may overlook minor issues. In a market with more listings, they may walk away instead of renegotiating.
The cancellation rate has stabilized
The good news is that cancellations are not accelerating nationally.
Redfin reported that the May cancellation share was unchanged from the prior month and had held at the same rate for four straight months. Redfin also said the share of U.S. homebuying deals that fall through has been fairly stable for the last two years, generally moving between 13.4% and 14%.
That suggests buyers and sellers may be adjusting to the current market. Buyers are entering deals with a clearer understanding of high payments. Sellers are becoming more realistic about price cuts, concessions and repair negotiations.
What this means
For buyers, a contract cancellation should not be the goal, but contingencies exist for a reason. Buyers should understand inspection, appraisal, financing and insurance deadlines before signing.
For sellers, a buyer walking away can cost time, momentum and money. A home that goes pending and then returns to market may raise questions. Sellers can reduce that risk by pricing realistically, disclosing known issues where required, preparing the home before listing and responding quickly to inspection concerns.
FAQ
What is a contract cancellation?
A contract cancellation happens when a home purchase agreement falls through before closing.
How common are contract cancellations in 2026?
Redfin reported that 13.6% of May homebuying deals fell through nationwide.
Why do buyers walk away from home purchases?
Common reasons include financing issues, inspection problems, appraisal gaps, insurance concerns, job or income changes, and second thoughts about affordability.
Are cancellations bad for sellers?
They can be. A failed contract can delay the sale and make future buyers ask why the deal fell through.
How can sellers reduce cancellation risk?
Sellers can price realistically, prepare the home before listing, address known issues, respond to buyer concerns quickly and avoid overpromising during negotiation.