A “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 overall economy are causing home sales to fall 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 Redfin, a real estate brokerage. This represents an increase from 14.9% in December 2024.
This is also the highest share since Redfin began tracking this metric in 2017.
“High housing costs and rising inventory have made home buyers more selective,” said Chen Zhao, head of economic research at Redfin. “Home sellers are outnumbering buyers by a record margin, meaning buyers who are in the market have options and may walk away if they believe they can find a better or more affordable home.”
There were about 47% more home sellers than buyers in the market in December — or 631,535 more — according to a separate report from Redfin. This is the largest gap since 2013, up 7.1 percentage points from the previous month.
“I’m calling 2025 the year of the seller, because so many sellers have contacted me,” said Ashley Rummage, a real estate agent in Raleigh, North Carolina, who participated in CNBC’s most recent housing market survey. “They reached out because they had a lot of fears about the economy. They had a lot of uncertainty about the current administration, mortgage rates, affordability. Those are all challenges this year.”
Regionally, Atlanta had the highest percentage of contract cancellations in December at 22.5%. This is followed by Jacksonville, Florida, with 20.6%; San Antonio at 20.6%; Cleveland at 20.2%; and Tampa, Florida, at 19.4 percent. Cancellations were least common in the New York metropolitan area, San Francisco and San Jose, California.
Pending sales actually fell 9% in December compared to November, according to the National Association of Realtors, so the numbers were already low. Given the high rate of cancellations, sales concluded in January and February are likely to be quite low.