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ellers beware: Homebuyers are backing out of deals at a record rate. In July, more than 15% of home purchase agreements fell through, the highest percentage for that month since Redfin began tracking cancellations in 2017. This uptick reveals the market's messy state, with buyers skittish about rising costs and nervous about their jobs.

    The typical mortgage rate is now more than twice the record low seen during the early days of the pandemic, making borrowing more expensive. With more homes available for sale and fewer buyers to compete with, shoppers can afford to be picky. Even after submitting a winning offer, they may wonder if a better bargain could be found elsewhere.

    Buyers' uneasy leverage won't last forever, but until borrowing gets cheaper and people feel better about the economy, expect presale jitters to remain. Home purchases can break down for many reasons, including inspections revealing defects or loan issues. Many buyers also count on selling their existing home before closing on a new one, which can be a challenge.

    The "cold feet" phenomenon is a function of time and options. The more time a buyer has to mull the deal and the greater their number of choices elsewhere, the more comfortable they are in walking away. Redfin data shows breakups were most common in places like Texas and Florida, which have seen a surge of available homes for sale.

    Buyers are also wary of shouldering the rising costs of ownership, such as insurance, upkeep, and property taxes. To offset these costs, agents tell me that buyers are taking advantage of the slower market by starting with an offer below the asking price and requesting concessions.

    The recent surge in cancellations adds insult to injury for sellers, who are being told to "get real" about the market and set their expectations accordingly. Even after ceding ground on the price or closing costs, they still risk losing a buyer to greener pastures.

    Analysts at John Burns expect the sluggish market to continue through the rest of this year and 2026. The pool of available homes has shrunk month over month in June and July, and would-be sellers are realizing that conditions aren't so favorable for them. If home loans get cheaper, more buyers may enter the market, competition could heat up, and there may be more pressure to stick with a deal once it's signed.

    Predicting mortgage rates is tough, but it's clear that the rise in cancellations is yet another symptom of what one economist described as a "savagely unhealthy" housing market. Perhaps a shift – and a thawing of buyers' cold feet – would be welcomed by everyone.