Record Homebuyer Deal Cancellations, but Prices Still Rise: What the Data Say Heading Into 2026

The cancellation spike: what changed in December

One of the clearest signs that buyer behavior is shifting is showing up *after* homes go under contract. Redfin’s latest look at MLS-based contract outcomes shows that cancellations surged in December 2025—meaning a larger-than-usual share of accepted offers never made it to closing. In Redfin’s estimate, about 16.3% of December purchase agreements fell through, representing roughly 40,000 canceled transactions, and that share was higher than the prior year’s December level. [worldpropertyjournal.com]

Why that matters: cancellations are often a leading indicator of sentiment. When buyers feel stretched, or when they believe they can do better by re-shopping, the first place you see it is in fallout rates—not necessarily in immediate price declines.

Why deals break: leverage, inspections, and affordability

Cancellations tend to rise when buyers have more negotiating power. Redfin’s commentary points to high housing costs and rising inventory making buyers more selective—and more willing to walk away if they think a better option is available. [worldpropertyjournal.com]

The mechanics of a broken deal are usually mundane: inspections uncover deferred maintenance, appraisal gaps force a renegotiation, or the buyer’s monthly payment math stops working. When rates are still elevated and prices are sticky, even small surprises can push a household over its affordability limit.

For sellers, the takeaway is straightforward: pre-list inspection prep, clean disclosures, and realistic pricing matter more in a world where fewer buyers are willing to waive contingencies.

Prices haven’t collapsed: what Case-Shiller and FHFA show

Even with rising fallout, the major home-price gauges are still showing modest gains. The S&P Cotality Case-Shiller National Home Price Index was up 1.4% year over year in November 2025 (and up 0.4% month over month on a seasonally adjusted basis). [housingwire.com][advisorperspectives.com]

FHFA’s House Price Index tells a similar story: prices rose 0.6% in November on a seasonally adjusted basis and were up 1.9% from November 2024 to November 2025. [housingwire.com]

Regionally, the market is uneven. Case-Shiller’s metro-level results show more strength in parts of the Midwest and Northeast while several Sun Belt metros have been softer. [realtor.com][housingwire.com]

In other words, cancellations can rise even when price indexes remain positive—especially when buyers gain optionality (more listings, more time) and decide that ‘no deal’ is better than a bad deal.

Practical implications for 2026

**For buyers:** more leverage usually means more room to negotiate repairs, credits, and price—*but* it also means underwriting and inspection discipline matter, because sellers may still be anchored to yesterday’s pricing.

**For sellers:** expect fewer ‘easy closings.’ A strong offer on paper is less valuable if the buyer is stretching. Make the home as inspection-proof as possible and be ready to offer targeted concessions (rate buydowns, repair credits) to keep deals together.

**For investors:** higher fallout can translate into longer acquisition timelines and more volatility in pipeline forecasting. Underwrite extra time for renegotiations and consider the local buyer-seller balance rather than relying on national averages.

What to watch next

• Whether cancellation rates stay elevated beyond the holiday-season distortions
• Pending sales momentum into Q1 2026
• Local inventory and price-cut trends, especially in metros where buyers have the most leverage

The bottom line: the housing market can ‘cool’ without a dramatic price drop. Rising cancellations are a real-time signal that buyers are becoming choosier—while prices, at least in the big national indexes, are still inching higher for now. [worldpropertyjournal.com][housingwire.com][housingwire.com]