Real Estate

Homebuyers Bailing: Discover the US Cities Where Home Purchase Deals Are Collapsing

Homebuyers canceled 15% of contracts in September, with Florida and Texas seeing the highest rates.

byAndres Castro

November 3, 2025, 10:26 AM

A red and white "For Sale" sign on a wooden post in front of a blurred, traditional suburban house.

A close-up view of a "For Sale" sign indicating a property is available. By MDL.

Executive Summary

53,000 home-purchase contracts were canceled in September, representing 15 percent of all homes that went under contract, an increase from 13.6 percent a year prior.

Rising mortgage rates, insufficient home price adjustments, and “sticker shock” from high insurance premiums and property taxes are key factors driving increased contract cancellations.

Southern markets, especially in Florida and Texas, are experiencing particularly high cancellation rates due to abundant for-sale inventory, rising insurance premiums, and elevated property taxes.

The Trajectory So Far

High home purchase contract cancellations are driven by significant affordability challenges for buyers, stemming from elevated mortgage rates and home prices that haven’t adjusted enough, combined with abundant for-sale inventory—especially in Southern markets where post-pandemic construction led to increased supply. This situation is further complicated by regional factors like soaring insurance premiums and substantial property taxes, which often cause “sticker shock” and empower buyers to withdraw from agreements when alternative properties are readily available.

Assessing Risk and Value

Elevated home-purchase contract cancellations, reaching 15% nationally and higher in key Southern markets, signal significant buyer affordability challenges and increased market risk for homebuilders, developers, and mortgage lenders. This trend, driven by high inventory, rising insurance premiums, and property taxes, puts downward pressure on home prices and valuations, particularly in oversupplied regions, suggesting a prolonged period of market softness until affordability improves.

Expert Predictions and Forecasts

Buyers are increasingly withdrawing from home-purchase agreements due to high mortgage rates, rising insurance premiums, elevated property taxes, and “sticker shock” from final payment estimates, particularly in regions with abundant for-sale inventory.

Sellers are having to make more compromises to keep deals alive as the market struggles to find balance, leading to elevated cancellation rates nationwide despite the housing landscape becoming more buyer-friendly.

Contract cancellations are expected to remain high as long as affordability remains strained and buyers have ample alternative properties to consider, with a moderation in this trend anticipated only if affordability conditions improve.

Homebuyers across the U.S. are increasingly withdrawing from purchase agreements, with a new Redfin report revealing that 53,000 home-purchase contracts were canceled in September. This figure represents 15 percent of all homes that went under contract that month, an increase from 13.6 percent a year prior, signaling a challenging market for both buyers and sellers despite the housing landscape becoming more buyer-friendly and borrowing costs easing slightly.

Rising Cancellation Rates

The uptick in cancellations underscores a market struggling to find balance, as steep costs continue to pressure buyers. Hannah Jones, senior economic research analyst at Realtor.com, noted that sellers are also having to make more compromises to keep deals alive. These dynamics are contributing significantly to the elevated cancellation rates observed nationwide.

While the market has shifted to favor buyers, this leverage primarily reflects a slower, more uncertain environment rather than robust purchasing power. Mortgage rates, though modestly eased, remain high by historical standards, and home prices have not adjusted sufficiently to restore true affordability for many prospective homeowners.

Regional Hotspots for Fallout

Several metropolitan areas experienced particularly high cancellation rates in September. Tampa, Florida, led the nation with 20.1 percent of home-purchase agreements falling through, up from 17.7 percent a year earlier. San Antonio, Texas, followed closely with 19 percent of deals called off.

Other major cities in Texas and Florida, including Fort Worth, Dallas, Orlando, Fort Lauderdale, and Jacksonville, also saw high cancellation rates. Riverside, California, was another prominent city on the list, reflecting ongoing affordability challenges similar to those in the South.

Factors Driving Southern Cancellations

Southern markets, particularly in Florida and Texas, are experiencing higher cancellation rates due to a combination of abundant for-sale inventory, rising insurance premiums, and elevated property taxes. Buyers in these regions are often confronted with “sticker shock” when final payment estimates are provided, and with numerous alternative listings available, many opt to walk away.

Both Florida and Texas saw significant new home construction following the pandemic, in response to a surge in demand from remote workers relocating. In September, Florida had approximately 208,000 homes for sale, exceeding pre-pandemic levels, while Texas had over 181,000. These high inventory levels have allowed prices to stabilize, but high home insurance premiums—with Florida homeowners paying the third-highest average in the country at $5,761 per year—and substantial property tax bills continue to undermine local homebuying capacity.

Market Outlook

Contract cancellations are expected to remain elevated as long as affordability remains strained and buyers have ample alternative properties to consider. A moderation in this trend is anticipated only if affordability conditions improve, which could lead to a tightening of overall market conditions once again.