Across the United States, the housing market is facing a wave of uncertainty as home purchase cancellations hit record highs this summer. According to a fresh Redfin analysis, more than 15% of home sales fell through in July 2025—a staggering 58,000 deals, the highest monthly cancellation rate since tracking began in 2017. The numbers, while eye-popping, reflect a broader shift in the real estate landscape, with buyers wielding more power and sellers feeling the squeeze in several major markets.
The epicenter of this trend? Texas and Florida. San Antonio led the nation, with nearly one in four contracts—22.7%—canceled in July, amounting to about 730 deals gone bust. Fort Lauderdale, Florida followed closely at 21.3%, with other Florida metros like Jacksonville (19.9%), Tampa (19.5%), and Atlanta, Georgia (19.7%) rounding out the top five, as reported by Redfin and corroborated by Newsmax and Nexstar Media.
What’s fueling this surge in failed deals? It’s a perfect storm of high home prices, stubbornly elevated mortgage rates, and widespread economic uncertainty. The median price of an existing home in July clocked in at $422,400—barely changed from a year earlier, according to the National Association of Realtors. Meanwhile, average mortgage rates hovered around 6.7%, more than double what buyers could secure just three years ago. Monthly payments for a typical 30-year fixed mortgage now reach $2,715, or $3,552 for those opting for a 15-year loan, as Better Mortgage reported. These costs are giving many would-be buyers pause, especially as inflation and consumer debt continue to rise.
But it’s not just about sticker shock or interest rates. Inventory has ballooned to over 2 million listings nationwide, with sellers now outnumbering buyers by more than 500,000. This surplus gives buyers more negotiating power than they’ve had in years. As Redfin noted, buyers are increasingly willing to walk away from deals if they spot a better bargain or encounter issues during home inspections. Bonnie Phillips, a Redfin Premier agent in Cleveland, shared a telling anecdote: "I recently had an older first-time buyer get cold feet the week before the deal was supposed to close. It was a beautiful house, we got it for the price she wanted and there were no issues in the inspection, but her neighbors convinced her that owning is too much of a hassle and she should rent instead."
Buyers using Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans face even more hurdles, with stricter structural integrity requirements and more potential repairs. These financing challenges are a frequent reason for last-minute cancellations, especially in markets where housing stock is aging or in need of upgrades.
“Affordability continues to be the top challenge for the housing market, and buyers are waiting for mortgage rates to drop to move forward,” said Buddy Hughes, Chairman of the National Association of Home Builders, in a statement cited by Nexstar Media. Builders themselves aren’t immune to the slowdown: single-family housing starts fell in June to an 11-month low, and permits for future construction sank to the lowest level in over two years. July brought a slight improvement, but the outlook remains cautious.
Even as mortgage rates dipped slightly—from 6.75% in mid-July to 6.58% more recently, as reported by Redfin and Freddie Mac—experts don’t expect significant relief anytime soon. Kevin O’Leary of "Shark Tank" fame told Nexstar Media he believes a 5.5% rate is the "magic number" that would bring buyers off the sidelines, but with the Federal Reserve treading carefully amid ongoing tariff policies from the Trump administration, a dramatic drop seems unlikely in the near term.
Regional trends are stark. The Sunbelt, which saw explosive price growth during the pandemic, is now cooling fast. Florida and Texas, in particular, have been building homes at a rapid clip, boosting inventory and giving buyers even more choices. Homes are also lingering longer on the market: the typical home under contract in July spent 43 days on the market, the longest span for any July since 2015. In places like West Palm Beach and Fort Lauderdale, properties are sitting for more than 90 days—nearly four times as long as the 24-day average seen just three years ago.
Not every market is struggling equally, though. In the Northeast and Midwest, where homes remain relatively affordable, cancellations are far less common. Nassau County, New York saw just 5.1% of contracts fall through in July, while Montgomery County, Pennsylvania reported 8.2%, and Milwaukee 8.3%. Even major metros like New York City, Boston, and Seattle were below the national average, hovering around 10%.
For sellers, the shift is palpable. Many are now making concessions to close deals, while others are pulling their listings entirely rather than slash prices. As Redfin’s report noted, "Sellers in the U.S. housing market outnumbered buyers by over 500,000, an imbalance that gives buyers a lot more negotiating power than they had in years." This dynamic is especially pronounced in Florida and Texas, where a construction boom has flooded the market with new options.
Some industry voices are sounding the alarm. Lawrence Yun, chief economist at the National Association of Realtors, observed, "We now have the highest inventory since the 2020 lockdown period, essentially five years ago." Meanwhile, Joel Kan of the Mortgage Bankers Association predicted, "Our forecast is for rates to stay close to the 6.6% range, at least through the end of the year." These forecasts suggest that the market’s current state—marked by high cancellations, longer listing times, and cautious buyers—is unlikely to change dramatically in the coming months.
As the summer winds down, experts anticipate more buyers will hold off until at least 2026, hoping for clearer economic signals, lower inflation, and—perhaps most importantly—better mortgage rates. For now, the U.S. housing market finds itself at a crossroads: abundant inventory and empowered buyers on one side, and anxious sellers and persistent affordability challenges on the other. Whether this standoff will break in favor of buyers or sellers remains to be seen, but one thing is certain—the days of frenzied, no-questions-asked home buying are over, at least for now.
