New findings from Redfin reveal that nearly 58,000 U.S. home-purchase agreements were canceled in July, amounting to 15.3% of the homes that went under contract last month. That number is up from 14.5% a year earlier, and marks the highest July rate in records dating back to 2017.
The study found that home purchases are falling through more than usual due to high prices, high mortgage rates, and economic uncertainty … all factors making buyers hesitant to seal the deal. Buyers also have more homes to choose from than in the past, which means they hold the negotiating power in many markets, and are often not in a rush. They may back out during the inspection period if a better home comes up for sale or they discover an issue they may not want to fix.
Cleveland Redfin Premier Real Estate Agent Bonnie Phillips said the most common reasons buyers back out of deals are cold feet, high standards, and issues with inspections, and she noted that cancellations are particularly common among buyers who use FHA and VA loans. But some would-be buyers have cited other reasons for backing out.
“I recently had an older first-time buyer get cold feet the week before the deal was supposed to close,” Phillips said. “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.”
States Where Home Purchases Are Likely to Fall Through
In San Antonio, Texas alone, 730 home-purchase agreements were canceled in July, equal to 22.7% of homes that went under contract last month—the highest percentage among the metros Redfin analyzed. San Antonio was followed by:
- Fort Lauderdale, Florida (21.3%)
- Jacksonville, Florida (19.9%)
- Atlanta, Georgia (19.7%)
- Tampa, Florida (19.5%)
Florida and Texas have been building more homes than anywhere else in the nation, prompting some buyers to back out of deals because they were confident they would be able to find a different home that worked better for them. Some buyers in the Sunshine State are also getting cold feet due to a rise in natural disasters, soaring insurance premiums, and a spike in HOA fees.
A recent examination of insurance premium trends by Matic found significant changes in the house insurance market in the first half of 2025.
The research illustrates the increasing difficulties experienced by homeowners, mortgage entities, and the larger housing market as affordability issues and coverage constraints continue, utilizing data from a dataset of Matic-quoted and insured homes.
The average premium for new home insurance policies increased 9.3% between 2024 and 1H 2025, to $1,966, according to Matic’s data. This continues a multi-year trend of high cost rise, even though it represents a decrease from the sharp increases of recent years. New policy rates have gone up by 45% since 2022, although Coverage A premiums have gone up by less than 12%. Many homeowners are consequently paying far more for comparatively less coverage.
According to the report, premium increases, particularly in areas where rate rises are the most pronounced, are exacerbating an affordability problem and making homeownership less accessible.
Home purchases were least likely to fall through in the following areas:
- Nassau County, New York (5.1%)
- Montgomery County, Pennsylvania (8.2%)
- Milwaukee, Wisconsin (8.3%)
- New York, New York (9.5%)
- Seattle, Washington (10.2%)
Virginia Beach, Newark See Biggest Upticks in Cancellations
In Virginia Beach, Virginia, nearly 500 home-purchase agreements were canceled in July, equal to 16.1% of homes that went under contract last month. That’s up 3.6 percentage points from 12.5% a year earlier—the largest increase among the metros in Redfin’s analysis. Rounding out the top five were:
- Newark, New Jersey (+3.3 ppts)
- Baltimore, Maryland (+3 ppts)
- San Antonio, Texas (2.8 ppts)
- Houston (2.8 ppts)
Virginia Beach reported the highest share of homeowners with VA loans than any other major metro, according to a separate Redfin analysis, with Baltimore also near the top of the list.
Cancellations fell from a year earlier in 11 metros, with the biggest drops reported in:
- Phoenix, Arizona (-2.4 ppts)
- Orlando, Florida (-1.4 ppts)
- Tampa, Florida (-1.3 ppts)
- Sacramento, California (-1.3 ppts)
- Philadelphia, Pennsylvania (-1.2 ppts)
Click here for more on Redfin’s report on July 2025 home sales and cancelations.
