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edfin reports the market has flipped into a buyer’s domain, with sellers outnumbering buyers by about 500,000. Buyers now use their leverage to demand that sellers pay for repairs and accept lower prices, while many sellers refuse to meet these demands, leaving homes less appealing to increasingly selective buyers.

    In August, 56,000 purchase agreements were voided, 15.1 % of all contracts that month—the highest August cancellation rate since 2017. This is up from 14.3 % in the previous August and well above the 11.4 % rate seen in August 2021 during the post‑pandemic boom. Redfin attributes the rise to a disconnect between buyers and sellers who are unwilling to compromise.

    A survey of Redfin agents found that 70.4 % of cancellations stemmed from inspection or repair issues, the leading cause. Other reasons included financing failures (27.8 %), sellers being unable to sell their own homes (21 %), changes in a buyer’s financial situation (14.9 %), and buyers finding a better property (12.9 %).

    Cities with the highest cancellation rates cluster in Florida and Texas, where a pandemic‑era influx spurred a construction surge and increased supply. Despite this, many sellers still expect premium prices, recalling the multi‑offer frenzy of 2020‑21, or are unwilling to reduce their asking price after paying a high purchase price.

    Redfin notes that lower‑priced homes are now more sought after because overall ownership costs—including insurance premiums that have spiked in disaster‑prone states like Florida and California—have risen sharply. Mortgage rates remain high, though they have eased since the Federal Reserve cut benchmark rates. Pending sales fell in September for the first time in nearly three months, even as the weekly average mortgage rate dropped for nine straight weeks.

    The market outlook is bleak: home sales are projected to hit their lowest level since 1995 as economic uncertainty spreads from buyers to sellers. A recent Fannie Mae survey found that nearly 70 % of Americans believe the economy is headed in the wrong direction, and 73 % think it’s a bad time to buy a house.

    Even sellers who are willing to negotiate can find deals collapsing. One Tampa agent recounted a case where a seller had already reduced a $375,000 listing by $25,000 after an inspection revealed 78 repair requests. The buyer then demanded an additional $100,000 price cut to cover repairs, and the transaction fell apart.