Home Sale Cancellations Surge, Signaling Cooling Housing Market

A growing number of home purchase agreements are being canceled across the United States, indicating a potential slowdown in the housing market. This trend is driven by a combination of high housing costs, increasing inventory, and buyer hesitancy amid economic uncertainty.

Rising Cancellations Reflect Buyer Caution

More than 40,000 signed home purchase agreements were canceled in December, representing 16.3% of all homes that went under contract, according to Redfin. This is up from 14.9% in December 2024 and marks the highest share since Redfin began tracking this metric in 2017.

Chen Zhao, head of economics research at Redfin, notes that “High housing costs and rising inventory have made homebuyers more selective.” The report highlights that there are now a record number of sellers compared to buyers, giving those in the market more options and increasing the likelihood they will walk away from a deal if they uncover a better or more affordable home.

Seller-Buyer Imbalance Widens

In December, there were roughly 47% more home sellers than buyers – a difference of 631,535 – according to Redfin. This gap is the largest recorded since 2013 and represents a 7.1 percentage point increase from the previous month.

Ashley Rummage, a real estate agent from Raleigh, North Carolina, participating in a CNBC Housing Market Survey, stated that 2025 is “the year of the seller,” as many sellers reached out due to fears surrounding the economy, uncertainty about the current administration, and concerns about mortgage rates and affordability.

Regional Variations in Cancellation Rates

Cancellation rates vary significantly by region. Atlanta experienced the highest percentage of contract cancellations in December at 22.5%, followed by Jacksonville, Florida (20.6%), San Antonio (20.6%), Cleveland (20.2%), and Tampa, Florida (19.4%).

Conversely, cancellations were less common in the New York metropolitan area, San Francisco, and San Jose, California.

Pending Sales Decline and Future Outlook

Pending home sales dropped by 9% in December from November, according to the National Association of Realtors. Given the high rate of cancellations, closed sales in January and February are expected to be weak.

Larkspur, CA Market Trends

In Larkspur, California, the median sale price for all home types was $1,750,000 in January 2026, representing a 104.7% year-over-year increase, according to Redfin. In North Larkspur, the median sale price was $1,725,000, an 86.5% year-over-year increase.

Currently, there are 9 homes for sale in Larkspur and 5 in North Larkspur, as of February 19, 2026. There are also 4 pending listings in Larkspur with a median listing price of $775,000.

Key Takeaways

• Home sale cancellations are rising nationally, indicating a cooling housing market.
• The imbalance between home sellers and buyers is widening, giving buyers more leverage.
• Regional variations exist in cancellation rates, with some areas experiencing higher rates than others.
• Pending sales are declining, suggesting continued weakness in the market.
• Larkspur, CA, is experiencing significant year-over-year price increases, but also has pending sales.