Contract cancellations stabilized in April, as buyers and sellers both adjusted to ongoing market headwinds, according to a new report from Redfin.
Cancellations ticked down 0.1 percent month over month to 13.4 percent, tying with January for the lowest level of cancellations since September 2024.
Cancellations, Redfin’s report said, reached a record high of 17 percent in 2020, and have largely been between 12 and 14 percent since. However, this trend is higher than pre- and early-pandemic norms, when cancellations were typically below 12 percent.
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“More sellers have come to terms with the fact that it’s a buyer’s market in most of the country, and they’re increasingly willing to lower prices and/or provide concessions to keep deals together,” the report read. “Buyers, for their part, have grown more accustomed to high housing payments, with pending home sales rising, and may be less likely to back out due to sticker shock when they see their final monthly payments.”
Like other market metrics, contract cancellations have become highly regionalized, with homebuyers in the Sun Belt most likely to back out of deals.
Atlanta (19.3 percent), San Antonio (18.9 percent), Fort Worth (17.6 percent), Tampa (17.4 percent) and Phoenix (17 percent) had the highest cancellation rates in April, the report said. Overall, these metros are strong buyers’ markets, with homesellers outnumbering homebuyers. In Atlanta, there are 70 percent more sellers than buyers, giving buyers the leverage to walk away from a deal rather than negotiate.
Meanwhile, contract cancellations are less common in California and several key Northeastern markets, as homebuyers have fewer listing choices. San Francisco had the lowest cancellation rate in April, barely reaching 3 percent.
“San Francisco’s housing market is booming, thanks largely to its status as the epicenter of AI,” the report said. “Next are Nassau County, New York (3.3 percent); San Jose, California (6.8 percent); Montgomery County, Pennsylvania (7.5 percent); and New York[, New York] (7.5 percent).”
“San Francisco, Nassau County and Montgomery County are three of just seven seller’s markets in the U.S.,” it added. “Buyers in those places are rarely backing out because if they do, it may be tough to find another house to purchase.”
Redfin contract cancellation data visualized with Claude AI.
Redfin’s analysis aligns with the National Association of Realtors’ latest pending home sales data, which revealed signed contracts on existing homes increased 1.4 percent month-over-month and 3.2 percent year-over-year in April.
Lawrence Yun
NAR Chief Economist Dr. Lawrence Yun said the uptick is due to homebuyers’ “cautious optimism” amid market headwinds, but warned that optimism would wear out if home price and wage growth trends aren’t corrected.
“Unless supply meaningfully increases, home price growth could outpace wage growth and further erode the homeownership rate,” he said. “All efforts need to be focused on boosting housing supply.”
