As buyers gain leverage, more are backing out of sales
Redfin data indicates buyers are gaining negotiating power as pending sales cancellations hit the highest level for the month of June since at least 2017.
Key points:
- New data published this week by Redfin found that 14.9% of pending home sales fell through in June — up from 13.9% in June 2024.
- Among the factors for the increase: inspection surprises, financial woes and a housing inventory uptick.
- But buyers aren’t the only ones hesitating — some sellers who feel discouraged by the thought of lowering their price expectations are also waiting to list.
Homebuyers and sellers are flexing what leverage muscle they have amid the slow summer market, new Redfin data suggests.
A Redfin report published on July 21, which found that more than 57,000 pending sales fell through in June, contains tough data for agents. Last month's 14.9% cancellation rate was the highest for the month of June since Redfin began tracking this data in 2017.
"Sellers are willing to make deals because in today's buyer's market, they don't want to lose out on a sale once they have a buyer under contract," said Van Welborn, a Phoenix-based Redfin Premiere agent. Sellers had more negotiating power when the market was competitive — but now, they are "doing whatever they can to close the deal," Welborn noted in the report.
More buyers are backing out
The uptick in contract cancellations is a sign that buyers — who now "have leverage," according to Crystal Zschirnt, a Redfin Premiere agent in Dallas — are being picky at closing. They could be balking at the results of an inspection report, finding a better home during that closing period or simply getting cold feet.
Finances are also playing a role in cancellations, the report noted. With 30-year mortgage rates still hovering close to 7%, some buyers are canceling once they see what their monthly payments would be.
"I've also heard of some buyers backing out because they're hoping home prices or mortgage rates are going to plummet soon, even though that's unlikely," Zschirnt said in a press release accompanying the report.
Sun Belt metro areas, many of which are flush with inventory, had some of the highest cancellation rates. Jacksonville, Florida, topped the list at 21.4%, followed by Las Vegas (19.7%) and Atlanta (19.6%). Metros in the Northeast, where inventory is lagging, had some of the lowest cancellation rates.
Slowdown in new listings continues
Potential sellers also appear to be holding off in response to the shifting market. Another report published by Redfin on July 21 found that new listings fell 3.2% in June compared to the month before, and 3.4% compared to June 2024 — the first annual decline since October 2023.
Median days on market also rose to 39 in June, up from 32 days a year ago — another sign that buyers are beginning to get the upper hand. Meanwhile, less than one-third of homes sold in June went above list price, the lowest share for the month of June in five years.
Buyers are gaining power
"The balance of power in the housing market has shifted toward buyers because listings have piled up and demand has slowed down," Redfin Senior Economist Asad Khan said. "Prospective sellers are feeling discouraged by this new reality. Some are reacting by staying put or renting their homes out instead of selling — especially if they're at risk of taking a haircut."
Redfin researchers are anticipating more of a trim than a cut by the end of 2025. According to Redfin's May 2025 forecast, home prices are expected to decline by 1%, and 30-year mortgage rates will likely stay around 6.8% through the end of the year.