According to a report issued by a U.S. real estate company, homebuyers are backing out of purchase agreements at an unprecedented pace, reflecting the growing leverage buyers have gained amid higher prices and increasing housing supply, as the real estate market undergoes a period of reshaping.
In December 2025 alone, nearly 40,000 home purchase agreements were canceled across the United States, representing 16.3% of all contracts signed during the month, according to the company’s analysis based on Multiple Listing Service (MLS) data. This rate rose from 14.9% recorded in December of the previous year, reaching the highest annual cancellation level since data tracking began in 2017.
Despite the usual impact of seasonal changes on market activity, the sharp decline in December suggests that the housing market is experiencing fundamental shifts. In many major cities, the number of sellers has significantly exceeded the number of buyers, giving purchasers more room to freely determine their options—especially when faced with high prices or properties with noticeable flaws.
Chen Zhao, head of economic research at the company, confirmed that rising homebuying costs and increased housing supply have given buyers greater freedom of choice. He added: “As buyers gain stronger negotiating power, many are more inclined to walk away from deals if they feel better or more cost-effective options are available.”
Typically, inspection issues are among the primary reasons for deal cancellations, as structural defects or maintenance problems often prompt buyers to withdraw from purchases. However, affordability challenges—such as high monthly mortgage payments—remain a key factor, even though they are not always explicitly cited.
At the city level, Atlanta recorded the highest cancellation rate in December at 22.5%, up from 19.6% in November. It was followed by Jacksonville and San Antonio at 20.6% each, then Cleveland at 20.2% and Tampa at 19.4%.
In contrast, Nassau County, New York (3.8%), San Francisco (4.2%), San Jose (8.9%), and New York City (10.5%) were among the areas with the lowest cancellation rates.
Meanwhile, California experienced notable increases in annual cancellation rates. San Jose posted the largest rise, up 6.8 percentage points to 8.9%, followed by Oakland with a 6.3-point increase to 11.3%, and Sacramento with a 4.7-point rise to 17.9%. Atlanta and Las Vegas also saw increases of 4.4 and 3.5 percentage points, respectively.
After an exceptional boom during the COVID-19 pandemic and sharp market corrections in 2022, the San Francisco Bay Area has gradually returned to stability, with signs pointing to a more balanced market.
Buyers now have more options and are more willing to negotiate. If a home is overpriced or has unresolved maintenance issues, buyers are simply moving on to explore other alternatives.
