The U.S. housing market is witnessing an unprecedented surge in “broken deals.” According to a recent report from real estate brokerage Redfin, approximately 40,000 home purchase agreements were canceled nationwide in January 2026. This represents 13.7% of all homes that went under contract during the month—an increase from 13.1% a year ago and the highest percentage for any January since data collection began in 2017.
This trend is particularly pronounced in Southern California. In Los Angeles, the cancellation rate climbed to 16.7%, up from 15.0% during the same period last year. Similarly, Anaheim saw its fallout rate jump from 11.4% to 13.4%. This localized spike suggests that even in high-demand coastal markets, buyers are becoming increasingly hesitant to cross the finish line.
The Shift to a Buyer’s Market: Leverage and Inspection Hurdles
The primary catalyst for this record-high cancellation rate is a definitive shift toward a Buyer’s Market. For the first time in years, inventory levels have risen to a point where buyers hold the upper hand in negotiations. With more options available, the FOMO (fear of missing out) that once drove the market has been replaced by a “wait-and-see” approach.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
