Here’s Why Real Estate Deals Are Falling Through at Record Numbers

By Joshua Holt

Meet Joshua, a licensed real estate professional and accomplished broker. As the forward-thinking leader of the Holt Real Estate Team, he has forged a strategic alliance with Keller Williams and PLACE to deliver on Our Promise.

If it feels like more home sales are collapsing before closing this year, you’re not imagining it. Across the country, contracts are breaking at the highest rate since before the pandemic, and both buyers and sellers are feeling it.

According to Redfin, deal cancellations hit a record high for this time of year in late 2025. After years of frenzy, the market is rebalancing, and that means expectations, timing, and local conditions matter more than ever.

Deal cancellations aren’t new, but the scale we’re seeing in late 2025 is causing people to wonder what’s really going on. Redfin Chief Economist Daryl Fairweather said cancellations have hit a record high for this time of year, and it comes down to one big reason: buyers and sellers aren’t seeing eye to eye.

Let’s unpack what’s really behind the surge in canceled deals, and what it says about where housing stands in 2025.

1. The buyer-seller disconnect. Buyers are frustrated because homes simply feel unaffordable. Sellers, however, are still anchored to 2021 pricing, hoping for those pandemic highs that are no longer realistic.

Even with small price drops, mortgage rates in the mid-6% range make payments feel heavy. Meanwhile, sellers are hesitant to budge because selling means giving up their comfortable 3% mortgage rate. That tension is showing up in rising cancellation rates, and it’s why even minor hiccups can cause deals to collapse.

Buyers should get pre-approved early and keep updating their numbers as rates and taxes change to avoid last-minute surprises. Sellers, on the other hand, should stay flexible, adjust pricing or offer to help with closing costs when needed. A little give-and-take can keep serious buyers engaged and help both sides close the deal.

2. The era of bidding wars is over. For most of 2021 and 2022, sellers had all the leverage. That’s changed.

The sale-to-list price ratio, a key indicator of how close homes sell to their asking price, has been falling nationwide. More homes are now selling below asking price, which signals a market shift in favor of buyers. Without bidding wars or multiple offers, sellers can’t hold out for top dollar anymore. For buyers, that means there’s finally room to negotiate, but it can also mean deals take longer to close.

With less competition in the market, buyers can take their time, make thoughtful offers, and negotiate credits for repairs, closing costs, or rate buydowns. Sellers should keep an eye on local comps, if showings are slow, a small early price adjustment can make the difference between a quick sale and weeks of waiting.

3. Seasonality and consumer behavior. Fall has always been a slower season for real estate. Between school schedules, holidays, and travel, fewer people are house-hunting. But this year’s slowdown feels stronger than usual.

Even though mortgage rates have dipped slightly, they haven’t triggered a buyer surge. Instead, they’ve brought more sellers into the market, and that extra inventory is giving buyers more choices.

If listings continue to outpace demand, home prices could level off or soften modestly heading into winter. That’s a healthy correction for the long term, but it can be frustrating if you were expecting a fast sale.

4. Regional divide. The national numbers don’t tell the whole story. Some regions are moving in opposite directions. Some areas are seeing steady growth, fueled by stable job markets and more affordable home prices. In these markets, buyers are still able to purchase homes on a typical income, and limited inventory is contributing to gradual price increases.

Other regions, especially those that experienced rapid building over the past few years, are starting to cool. An oversupply of homes (particularly condos and newer developments) is leading to slight downward pressure on prices.

What you should do is focus on your local market data, not national headlines. Real estate is hyper-local, and what makes sense in one area might look completely different in another.

If you’re planning to buy or sell soon, don’t wait for the perfect moment – plan for it. Feel free to text, call, or email me to schedule a free, no-obligation, one-on-one consultation. I’ll walk through your situation, look at real numbers, and build a strategy that helps you move forward with confidence in today’s market.