Increase in home purchase cancellations attributed to economic uncertainties and stock market fluctuations

From Yahoo Finance: 2025-06-27 12:18:00

The U.S. housing market is seeing a rise in home purchase agreements falling through before finalization. In May, 6% of pending contracts were canceled, up from 5% last year. Factors such as unexpected costs or low appraisals are contributing to the trend.

Lawrence Yun, NAR’s chief economist, attributes the increase in cancellation rates to stock market fluctuations, lower consumer confidence, and economic uncertainties. Pending U.S. home sales rose 1.8% from the previous month and 1.1% from May last year, despite a sales slump since 2022.

Redfin’s analysis of housing data found that 14.6% of pending sales in May fell through, the highest percentage for the month since 2017. Fannie Mae revised their outlook for existing home sales, expecting a 2% increase this year to 4.14 million, with a projected 9.5% jump in 2026.

Read more: Data show increase in cancellations of home purchase agreements versus a year ago