A buyer’s market is a market situation where supply of an asset (stocks, bonds, real estate, etc.) exceeds demand, giving purchasers the upper hand to negotiate lower prices and better terms. For investors this matters because it can create opportunities to acquire assets at discounts or to be more selective, much like shopping during a big sale when sellers are eager to move inventory and buyers can avoid paying full price.
seller’s marketsfinancial
A seller’s market is a market condition where demand outpaces supply, giving sellers the upper hand to command higher prices and quicker sales—think of an auction where many buyers compete for few items. For investors this matters because it can boost short-term returns and ease exits, but it also raises the risk of overpaying and reduced bargaining power when buying, so timing and valuation discipline become more important.
contingenciesfinancial
Contingencies are potential events or conditions that might happen in the future and could affect a person’s or organization’s financial situation. They are like warning signs or possibilities, such as a storm that might or might not occur, which could require extra preparation or expense. Investors pay attention to contingencies because they can influence the value or stability of investments if those events come to pass.
inspection contingencyfinancial
An inspection contingency is a contract clause that gives a buyer the right to examine a company's assets, records, facilities, or financials and to cancel or renegotiate the deal if problems are found. For investors, it matters because it affects whether a transaction will close, the timing of the deal, and the likely price or remedies if hidden liabilities or defects emerge—think of it like a test drive that can stop a purchase if the vehicle has serious faults.
mortgage ratesfinancial
Mortgage rates are the interest percentages lenders charge when people borrow money to buy a home or refinance an existing loan. They determine how much borrowers pay each month and over the life of the loan — like the added cost on top of a car’s sticker price — and influence housing demand, consumer spending, and bank profitability, so investors watch them as a bellwether for the broader economy and financial markets.
pending-salesfinancial
Pending sales are transactions that have been agreed to by buyer and seller but are not yet finalized or recorded as completed revenue; they often await conditions like delivery, inspection, financing, or formal closing. For investors, pending sales act like a peek at future revenue and cash flow—similar to a signed purchase agreement that hasn’t closed—so they help gauge near-term business strength but can still fall through and should be interpreted with caution.
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Redfin reports 13.4% of home-sale agreements that went under contract in March were canceled. House hunters are getting cold feet as costs stay high and economic uncertainty is in the air.
Contract cancellations are most common in big-time buyer’s markets like San Antonio and Orlando, where home searchers have a lot of options.
They’re least common in Nassau County, Montgomery County and Milwaukee—three of just five seller’s markets in the U.S.
SEATTLE--(BUSINESS WIRE)--
Nearly 53,000 U.S. home-sale agreements fell through in March, according to a new report from Redfin, the real estate brokerage powered by Rocket.
That’s equal to 13.4% of homes that went under contract that month—up from 12.5% a year earlier—and tied with 2023 as the highest March share on record aside from 2020, when the uncertainty surrounding the start of the pandemic caused many buyers to back out of deals.
This is based on a Redfin analysis of MLS pending-sales data. The data is seasonal; typically, there’s a higher share of cancellations at the end of the year and a lower share in the spring. That’s why Redfin is comparing this March to past Marches.
There are several reasons home-purchase agreements are falling apart at a higher rate than usual for this time of year:
It’s a buyer’s market. There are 600,000 more home sellers than buyers in the U.S. housing market. That gives buyers negotiating power when they’re entering into a home-purchase agreement with sellers, and it makes it easier for buyers to include contingencies like the inspection contingency, which allows buyers to back out during a certain period, knowing they have plenty of other options. They may cancel a deal because an issue comes up that they don’t want to repair, because they find a house they like better, or because they simply changed their mind.
Housing costs are high. Mortgage rates jumped in March, and home-sale prices are rising. Some buyers back out after going under contract when they take a deeper look at their future monthly payments, closing costs and other associated payments.
Economic uncertainty. The Iran war is causing turmoil in financial markets and pushing mortgage rates up. It’s also contributing to an air of financial uncertainty for buyers, some of whom are changing their minds about making major purchases as a result.
“Buyers are getting cold feet,” said Patricia Ammann, a Redfin Premier agent in Arlington, VA. “There have been layoffs, ups and downs in the market and geopolitical turmoil–and on top of all that, housing costs are still high. Because buyers are considering committing to spending so much money in uncertain times, they’re extremely picky, which is leading some of them to back out before a deal closes.”
Contract Cancellations Are Most Common in San Antonio and Other Major Buyer’s Markets
In San Antonio, 18.7% of home-purchase agreements were canceled in March, the highest share of the 43 major U.S. metros Redfin analyzed. It’s followed by four other Sun Belt metros: Orlando, FL (18.1%), Riverside, CA (18.1%), Atlanta (18%) and Las Vegas (17.8%).
All five of those are big-time buyer’s markets. In San Antonio, for instance, there are more than twice as many sellers as buyers. That allows buyers to back out of one deal and fairly easily move on to the next one.
Contract cancellations are leastcommon in Nassau County, NY, where just 3.5% of deals fell through in March, the lowest share among the metros Redfin analyzed. Next are Montgomery County, PA (5.7%), Milwaukee (6.1%), New York (7.4%) and Seattle (8.5%).
Nassau County, Montgomery County and Milwaukee are three of just five seller’s markets in the U.S. Buyers in those places are rarely backing out because if they do, it may be tough to find another home.
Cancellations Increased Most in Riverside and Atlanta
Contract cancellations rose most in Riverside, to 18.1% in March from 15.1% a year earlier. Next come Atlanta, where 18% of contracts were cancelled, up from 15.3%, and Columbus, OH (14.8%, up from 12.2%).
Cancellations declined in 10 metro areas. The biggest decline was in Miami, where 14.5% of homebuying agreements were canceled, down from 16.1%. Next come Cleveland (14%, down from 15.1%), Nassau County (3.5%, down from 4.4%), Milwaukee (6.1%, down from 7%) and Fort Worth, TX (16.2%, down from 17.1%).
Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin’s clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.
