“Sale Pending” sign in front of a home for sale in Larkspur, California on November 30, 2023.
Justin Sullivan | Getty Images
Serious headwinds in the housing market and the broader economy are causing home sales to decline at an alarming rate.
More than 40,000 signed home purchase contracts were canceled in December, representing 16.3% of all homes under contract, according to real estate brokerage Redfin. This has increased from 14.9% in December 2024.
This is also the highest share since Redfin began tracking this metric in 2017.
“Higher home prices and increased inventory are making homebuyers more selective,” said Chen Zhao, head of economic research at Redfin. “The number of home sellers outnumbering buyers by a record margin means buyers in the market have options and are likely to leave if they believe they can find a better, more affordable home.”
According to another report from Redfin, there were about 47% more home sellers than buyers in the market in December, or 631,535 more people. This is the largest difference on record since 2013 and represents an increase of 7.1 points from the previous month.
“I’m calling 2025 the year of the seller because so many sellers have reached out,” said Ashley Ramage, a Raleigh, North Carolina, real estate agent who participated in the latest CNBC Housing Market Survey. “They reached out because there was a lot of concern around the economy. There was a lot of uncertainty about the current administration, mortgage rates, mortgage affordability, etc. All of these are challenges this year.”
By region, Atlanta had the highest contract cancellation rate in December at 22.5%. Jacksonville, Fla., followed at 20.6%. San Antonio is 20.6%. Cleveland’s rate is 20.2%. and Tampa, Florida at 19.4%. The New York metropolitan area, San Francisco and San Jose, Calif. had the fewest cancellations.
According to the National Association of Realtors, pending sales were actually down 9% in December compared to November, and that number was already low. Given the high cancellation rate, closed sales are likely to be quite weak in January and February.
