The number of pending home sales canceled by buyers has increased for the past three months, according to the National Association of Realtors (NAR).
NAR data shows that 6% of pending home sales contracts were canceled in May, up from 5% in the same period in 2024. This is the third consecutive month of increased pending home sales in the US.
Meanwhile, separate analysis from real estate platform Redfin shows that 14.6% of pending home sales in May were canceled, the highest May level since 2017.
A home purchase contract is considered “pending” when both parties have signed it but the transaction has not yet been completed. It usually takes about one to two months to complete the process.
The trend reflects the fact that even buyers who have reached an agreement may be forced to back out at the last minute, experts say. This could be due to unexpected costs, such as changes in credit, employment, financial circumstances, or a lower-than-expected property valuation.
“Volatile stock markets, declining consumer confidence, and broader economic and geopolitical uncertainties may have contributed to higher-than-normal cancellation rates in recent months,” said Lawrence Yun, NAR’s chief economist.
According to the real estate platform Realtor, the percentage of Americans who said they were on the fence about buying a home has also increased. “The recent decline in consumer confidence adds to the headwinds for this summer’s home-buying season,” said Jake Krimmel, senior economist at Realto.
The U.S. housing market has been in a prolonged slump since 2022, as high interest rates and rising prices have made homeownership unaffordable for many. Redfin data for the four weeks ending June 22 showed pending sales fell 2.3% from the same period in 2024, the largest decline in three months.
Fannie Mae has revised down its forecast for existing-home sales in the U.S. this year to 4.14 million, down from its previous forecast of 4.24 million, with 30-year fixed mortgages averaging 6.5%. Sales will rebound 9.5% in 2026, helped by a fall in mortgage rates to 6.1%.