Purchase cancellations and listing withdrawals are up as frustration runs high among homebuyers and sellers, according to a trio of new reports.
Key points:
- Purchase cancellations are elevated as many buyers balk at repair issues while others struggle with financing.
- Sellers are pulling back their listings, with many expected to return to the market when conditions improve.
- Withdrawals are also weakening demand, since many sellers are also buyers. The one bright spot? There is opportunity in the condo market, where sellers significantly outnumber buyers.
The latest housing market trends are making it clear that neither buyers nor sellers are thrilled with the current conditions.
For buyers, this is apparent through the volume of recent purchase cancellations and general lack of demand. In August, around 56,000 purchase agreements were canceled — 15.1% of the total that went under contract, according to Redfin. This was the highest August rate in Redfin records dating back to 2017.
Meanwhile, sellers are taking note of this environment. “Through September, withdrawals are happening at a rate of 42.3% of new listings,” Compass Chief Economist Mike Simonsen said in his weekly update, which cited Compass data. “That’s significantly higher than any recent September that we have data for.”
Simonsen estimates that around 200,000 sellers who tried to sell this year are waiting for conditions to improve.
A ‘bad time’ to buy? Nearly 3 in 4 consumers think so
This market pessimism is reflected in Fannie Mae’s September Home Purchase Sentiment Index, which found that 73% of consumers surveyed said it was a “bad time” to buy a home. Only 27% of respondents said it was a “good time” to buy. Consumers were more optimistic about selling conditions, with 57% saying it’s a “good time” to sell — though that share has dropped from 65% a year ago.
While it’s clear many buyers and sellers are frustrated with this market, it’s not bad for everyone, said Daryl Fairweather, chief economist at Redfin.
“There are some winners in the market, like home sellers who downsize to condos and buy them in cash,” Fairweather told Real Estate News in an email, noting that those buyers can avoid higher mortgage rates in a condo market where there are about 72% more sellers than buyers.
Pulling listings hurts supply and demand
Sellers who pull their listings are particularly important because many of them are also buyers, Simonsen said. This trend could create a situation where demand weakens as sellers hold on to their property.
Though this possibility wouldn’t be good news in the short term, having these would-be sellers return in the spring could drive demand. But this will depend on whether economic conditions can stabilize or improve.
“The takeaway with withdrawals is that there are a lot of frustrated sellers now. So it’s not just shadow inventory … it’s also an illustration of demand, or delayed purchases,” Simonsen said. “These people are going to try again to purchase in 2026.”
Why…
Read More: Consumers are fed up with today’s housing market
