B
uyers are gaining negotiating power in the housing market as pending sales cancellations hit a record high for June. According to Redfin data, 14.9% of pending home sales fell through last month, up from 13.9% in June 2024. This increase is attributed to factors such as inspection surprises, financial woes, and an uptick in housing inventory.

    Buyers are being picky at closing, with some backing out due to unexpected inspection results or finding a better home during the closing period. Finances also play a role, with buyers canceling once they see their monthly mortgage payments. "I've heard of some buyers hoping for a price drop or lower interest rates, but that's unlikely," said Crystal Zschirnt, a Redfin Premiere agent in Dallas.

    Sun Belt metro areas, which have an abundance of inventory, had the highest cancellation rates, with Jacksonville, Florida topping the list at 21.4%. In contrast, Northeast metros, where inventory is scarce, had lower cancellation rates.

    The slow summer market has also led to a slowdown in new listings, with a 3.2% decline in June compared to the previous month and a 3.4% decline from June 2024. Median days on market rose to 39 in June, up from 32 days a year ago, indicating that buyers are gaining power.

    "Sellers are willing to make deals because they don't want to lose out on a sale once they have a buyer under contract," said Van Welborn, a Phoenix-based Redfin Premiere agent. With the market shifting towards buyers, prospective sellers are feeling discouraged and some are choosing to rent their homes instead of selling. According to Redfin's forecast, home prices are expected to decline by 1% by the end of 2025, with 30-year mortgage rates staying around 6.8%.