In December, homebuyers across the United States canceled roughly 40,000 purchase agreements, marking the highest December cancellation rate on record dating back to at least 2017. According to Redfin’s analysis of MLS pending sales data, 16.3 percent of homes that went under contract in December ultimately fell apart, up from 14.9 percent in December of the prior year.
At first glance, this surprises many people. Mortgage rates dipped to around 6.09 percent, the lowest level seen in roughly three years. Lower rates are often assumed to create urgency and stability. Instead, buyers are pulling back more frequently, not because they cannot buy, but because they now have choices.
A Market Shift Toward Buyer Selectivity
Redfin’s economists point to a national market that has moved firmly into buyer’s market territory. Inventory has grown, and in many regions, sellers now significantly outnumber buyers. This shift has changed buyer behavior.
When buyers feel pressure or scarcity, they tend to compromise. When inventory expands, buyers slow down, evaluate more carefully, and walk away if a home does not meet expectations. This is not panic. It is leverage.
High housing costs still matter. Even with slightly lower rates, affordability remains stretched for many households. Buyers are running numbers more carefully, scrutinizing condition, pricing, and long-term value. If something feels off, they are more willing to step back and wait.
Inspections Are Playing a Larger Role
Contract cancellations often happen during the inspection phase, and Redfin notes that this continues to be a major factor. Buyers may formally use inspection objections even when the underlying reason is broader, such as concerns about future resale, maintenance costs, or the availability of better options.
In a market with rising inventory, inspections become less about fixing minor issues and more about confirming that a home is truly worth the price being paid.
Regional Differences Matter
Cancellation rates vary widely by metro area. In December, Atlanta led the nation with 22.5 percent of contracts canceled, followed closely by Jacksonville, San Antonio, Cleveland, and Tampa. These markets have seen a rapid buildup of listings, giving buyers significant negotiating power.
By contrast, coastal and supply-constrained markets such as Nassau County, San Francisco, and San Jose reported far fewer cancellations. Even so, some of these areas experienced notable year-over-year increases, signaling that buyer caution is spreading beyond traditionally hot markets.
What This Means for Buyers
For buyers, this environment offers opportunity, but only with strategy. Having options does not mean every home is a good deal. Careful evaluation, realistic inspection expectations, and a clear understanding of value are essential. Walking away can be a smart decision when it protects long-term financial health.
What This Means for Sellers
For sellers, contract cancellations are a signal, not a failure. Pricing, condition, and transparency matter more than ever. Homes that are well-prepared, accurately priced, and supported by clean disclosures are far more likely to survive inspections and appraisal scrutiny.
Today’s buyers are not looking for perfection. They are looking for value and confidence.
The Bigger Picture
This data reinforces a broader truth about the current housing market. Demand has not disappeared, but behavior has changed. Buyers are acting thoughtfully, sellers must compete more deliberately, and successful transactions require preparation on both sides.
For those living in or relocating to Colorado Springs, understanding these national trends helps frame local decisions with clarity and confidence.
Source: Inman News, January 26, 2026, reporting on Redfin MLS pending sales data.
If you would like more insight into how these national trends are showing up locally, I am always happy to share additional data and context.
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