Home Contract Cancellations Hit 16.3% in December

Home contract cancellations climbed to a record high in December, reflecting deepening uncertainty in the housing market, according to an analysis by Redfin.

Redfin reported that more than 40,000 home-purchase agreements were canceled during December, representing 16.3% of all home contracts signed that month. The share was the highest in Redfin records dating back to 2017, and it exceeded levels seen even in March 2020, when global pandemic lockdowns began.

Chen Zhao, head of economic research at Redfin, said high home prices and rising inventory have made buyers far more selective. With more options available, she said buyers are increasingly willing to abandon a deal if they believe they can find better terms or a cheaper home.

The cancellations came as existing-home sales fell further. Total existing-home sales last year were 4.06 million, down from 2024, which had already marked the lowest level since 1995.

Analysts said several factors are weighing on the market at once: mortgage rates and home prices remain elevated, many sellers are reluctant to accept that peak conditions have passed, and buyers are uneasy about the economy and long-term costs.

Data from Realtor.com showed sellers pulled listings from the market much faster than a year earlier, with withdrawals up 50% year over year.

Joanne Rogers, an agent with Windermere Realty Trust, said sellers still feel like it is a seller’s market, while buyers believe it should be a buyer’s market. She described the result as a stalemate where neither side clearly holds leverage.

Redfin also said buyers may be using inspection contingencies as an exit route. Some deals are canceled after inspections uncover structural problems, but the report said many buyers also walk away after realizing mortgage payments would be higher than expected.

Allison Williams, a Redfin agent in Sacramento, said buyers know they have choices and negotiate aggressively. She said buyers often cancel if a seller will not address maintenance issues or if the home is priced too high.

BY HOONSIK WOO [woo.hoonsik@koreadaily.com]