Why More Home Sales Are Falling Through and How Sellers Can Stay on Track.

More home sales are canceling before closing than in recent years.

January saw over 41,000 canceled contracts, representing 14.3% of pending sales—the highest rate for this time of year since 2017.

This shift reflects changing market dynamics and buyer behavior. Several factors are driving the uptick in cancellations. With inventory at its highest since 2020, buyers have more options and feel less urgency. Economic uncertainty, layoffs, rising costs, and fluctuating interest rates add hesitation even after going under contract.

Affordability remains a challenge as mortgage rates hover near 7% and prices stay elevated, leading to sticker shock during inspections and appraisals. Sellers can reduce the risk of a deal falling apart by pricing strategically to attract serious, confident buyers.

Choosing buyers wisely—looking beyond the highest offer to consider financial stability, demeanor, and contingencies—can also strengthen the path to closing. Keeping backup buyers engaged provides leverage if the first deal falters, and staying flexible on inspection or appraisal issues helps preserve momentum.

The bottom line: cancellations are rising, but they don’t have to derail your sale. With smart pricing, careful buyer selection, and pragmatic negotiation, sellers can navigate today’s market and reach the finish line with confidence.