Home Contract Cancellations Down: Top Markets Where Deals Are Most Likely to Close

Canceled home sales dipped in early 2026, reflecting market resilience as buyers held on to their purchase plans in the face of growing economic uncertainty.

In February, the share of failed home sales stood at 7.2%, down from 7.4% a year ago and below January’s 7.6%, indicating stability, according to Realtor.com®’s latest monthly housing market trends report.

This comes as pending home sales, which are listings under contract and in the final stages of closing, rose 4.2% year over year, marking the largest year-over-year increase in 15 months. This benchmark is Realtor.com’s top economist Jake Krimmel partly attributed to mortgage rates remaining in multi-year declines since mid-January and falling below 6% by the end of February.

Amid low consumer confidence and growing economic uncertainty driven by disappointing job numbers, volatile tax policy, and the armed conflict in Iran, economists have been keeping an eye on consumers pulling the plug on home purchases.

However, February’s data shows little evidence of a “throw in the towel” mentality. Instead of the rising red flag of pending deals returning to active status, indicating cancellations, the market remained remarkably stable.

Among the 50 largest US metros, five markets stand out for their exceptional consumer decision. New York City leads the way with a nationally low rate of just 2.7% of falling deals, followed by Buffalo, NY (2.9%), Raleigh, NC (3.4%), San Jose, CA (3.4%), and San Francisco (3.6%).

“While it’s hard to know for sure why a personal agreement falls apart, one of the most common citations is financial issues,” Krimmel said. “There is reason to believe that in high-income metros like New York, San Jose, and San Francisco, high-income consumers may not be able to afford the roadblocks.”

Other metros in February that saw the lowest percentage of contract cancellations include Virginia Beach, VA (3.7%), Hartford, CT (4.3%), Richmond, VA (4.3%), Philadelphia (4.5%), and Minneapolis (4.6%).

Deposits are refundable in New York City

What keeps buyers committed to closing? The answer depends on the market. In high-priced, starved coastal metros, buyers worry they may not find a comparable place to go. Meanwhile, in areas with more availability, a combination of high affordability and demand keeps homebuyers on the move.

Donna Olshanpresident and real estate agent at Olshan Realty, tells Realtor.com that in New York City, there is another key factor keeping buyers from leaving.

“In New York, it’s quite common for the buyer to put down a 10% deposit on the contract that the seller’s attorney will hold at eviction,” he says. “The deposit is not refundable, unless there is a mortgage emergency and the buyer cannot get the money to buy the house, or if the cooperative board rejects the buyer.”

When buying a co-op or condominium, the buyer’s attorney will usually do their due diligence, thoroughly researching the property, down to reading the minutes of the co-op or condo board meetings.

“When all this is done, the buyer already has a lot of information about the place and then puts down 10% and it is closed,” he said.

In the Big Apple, the median list price was $749,450 last month and the average home stayed on the market less than a day last year as new listings fell nearly 12% year over year.

Bulletproof financing in the San Francisco Bay Area

In San Jose, the most expensive metropolitan area in the nation, where the median home comes in at a staggering $1,349,000, the shopping environment is made up mostly of well-paid, high-quality tech professionals, making financial failures and last-minute shopping emergencies less likely than in other markets. Alexander Kalareal estate agent based in the Bay Area.

“Buyers today are often driven by data and analysis, modeling fees, taxes, and different rate conditions long before they write an offer,” explains Kalla. “Lenders in this market are used to that complexity, so pre-approval, underwriting, and contingency planning are often in place before a deal is signed, which reduces the risk of defaults once they’re in.”

At the same time, inventory in San Jose remains strong, keeping the metro retailer friendly. In slow months, Kalla says, potential buyers jump on the available listings, and this scarcity mindset makes them more willing to deal with appraisal issues and appraisal vacancies, rather than walk away and start their search all over again.

“Across the country, cancellations have increased as higher inventory levels and softer prices give consumers more options and less fear of missing out,” added the agent. “San Jose is almost the exception: Even as inventory grows, it rarely reaches a point where buyers feel overwhelmed by options, and homes in desirable school districts or near major campuses still attract strong, committed demand.”

Kalla points out that for many families, shopping in the San Jose area is not just a transaction but also a lifestyle that provides access to prestigious schools and community centers connected to the best neighborhoods.

“That emotional benefit, in addition to the big financial investment, makes the support feel very worthwhile,” he says.

On the East Coast, Hartford, CT, was one of seven major cities where active listings fell in February, reflecting a strengthening of housing construction.

“It’s very difficult to find a house with our inventory problems today,” Carl Lantza West Hartford-based real estate agent at Coldwell Banker Realty, tells Realtor.com. “So it will have to be a big reason to cancel the deal you have been waiting for a long time and work hard to get it as a buyer.”

A long-term cancellation habit

Historically, cancellations peaked at 10.5% in March 2020 at the start of the COVID-19 pandemic, then fell to an unusually low 5.4% in May 2021 as the housing frenzy marked by intense competition reached fever pitch.

Defaults rose again in late 2022 as mortgage rates rose sharply from their pandemic-era lows, leading to financial instability that made closures uncertain.

“With prices settling in a higher but stable range, cancellations have slowed down and remained stable in 2024 and early 2026,” Krimmel explained.