Buyers have been walking away from home deals at painful rates for two years, and April was the first month in a while where the trend actually stopped. Cancellations didn't crash, and they didn't even fall much.
They just stopped climbing - and in this housing market, flat is the new good news.
Around 47,000 home-sale agreements got canceled in April, according to a new Redfin report. That's 13.4% of homes that went under contract during the month, down slightly from March and tied with January for the lowest rate since September 2024.
That's still way above the levels from the red-hot seller's market of 2020 to early 2022, but the direction matters. Pending sales have also been ticking up the past few months, which suggests buyers are getting more serious before they sign.
A few things are doing the work, with sellers negotiating more on price and concessions to keep deals from blowing up. Buyers are also slowly accepting that monthly payments aren't going back to 2021 levels, and the average 30-year fixed mortgage rate fell for three straight weeks in April before bouncing back in May.
Redfin agent Timothy Hourigan in Syracuse, NY said the cancellations he sees now usually come from post-inspection repair costs and appraisal issues, not buyers panicking. In tighter markets, he added, buyers are still more likely to compete than back out.
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The Sun Belt is doing most of the cancellation work, with Atlanta posting the highest cancellation share among the 50 largest metros at 19.3%, followed by San Antonio (18.9%), Fort Worth (17.6%), Tampa (17.4%), and Phoenix (17%).
The reason is supply. In Atlanta alone, there are roughly 70% more sellers than buyers right now, which means buyers can walk away over a tough inspection report or a financing hiccup and still have ten other homes to look at.
On the other end of the map, San Francisco had the lowest cancellation rate at 2.8% thanks in part to the AI boom pulling demand back into the Bay Area. Nassau County, San Jose, Montgomery County PA, and New York City rounded out the bottom five.
Orlando also saw cancellations fall fastest month over month, dropping from 18.5% in March to 16.8% in April, with New Brunswick, NJ and San Francisco close behind on the improvement list.
Redfin called out three metros where cancellations actually went the wrong way in April: Detroit, Nashville, and Houston. Those are worth tracking, since rising fallout rates usually show up in cancellations before they hit closed sales data.
Where buyers are bailing first is where prices tend to soften next, and the REIT and housing market is going to feel that early.
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