Homebuyers are backing out of deals at the fastest pace since 2017

The housing market and broader economy face serious headwinds Home sales At an alarming rate.

More than 40,000 home purchase agreements signed in December were canceled, representing 16.3% of all homes that went under contract, according to real estate brokerage Redfin. This is up from 14.9% in December 2024.

It’s also the highest share since Redfin started tracking this metric in 2017.

“High housing costs and high inventory have made homebuyers more selective,” said Chen Zhao, head of economic research at Redfin. “Home sellers outnumber buyers by a record margin, meaning buyers who are in the market have options and may leave if they think they can find a better or more affordable home.”

There were roughly 47% more home sellers than buyers in the market in December (or 631,535 more, numerically), according to a separate report from Redfin. This is the largest gap in records dating back to 2013 and an increase of 7.1 percentage points from the previous month.

“I call 2025 the year of the seller, because I had a lot of sellers reaching out to me,” said Ashley Romage, a real estate agent from Raleigh, North Carolina, who participated in CNBC’s latest housing market survey. “They were reaching out because they had a lot of fear about the economy. They had a lot of uncertainty about the current administration, mortgage rates, affordability. Those are all challenges this year.”

Regionally, Atlanta saw the most contract cancellations in December (22.5%), followed by Jacksonville, FL (20.6%), San Antonio, TX (20.6%), Cleveland, OH (20.2%) and Tampa, FL (19.4%). Cancellations were least common in the New York metropolitan area, San Francisco, and San Jose, California.

In fact, pending sales were down a whopping 9% in December compared to November, according to the National Association of Realtors, so the numbers were actually down. Due to the high rate of cancellations, closed sales in January and February are likely to be very weak.