Written by: Internal Analysis & Opinion Writers
U.S. housing markets are undergoing a significant shift: inventory levels are climbing, and home sale cancellations are hitting historic highs, pointing to rising tension between buyers and sellers amid persistent affordability challenges.
Active listings rose to 1.36 million in June, a 2.3% increase from May and a notable 17.2% jump compared to the same time last year. This marks the highest number of homes on the market since late 2019, signaling a move toward more balanced conditions and loosening the tight inventory that had defined recent years.
While the increase in available homes may seem promising for prospective buyers, affordability remains a major barrier. Mortgage rates are hovering near 6.8%, significantly dampening purchasing power and pushing many potential buyers to the sidelines. Even those with strong credit profiles are feeling the squeeze as financing costs eat into monthly budgets.
One of the clearest signs of buyer hesitation is the sharp rise in canceled home sales. In June alone, over 57,000 pending transactions were called off—roughly 15% of all deals under contract. That figure represents the highest cancellation rate for any June on record, reflecting how quickly market sentiment can shift under the weight of economic uncertainty and rising rates.
Several factors are fueling the trend. Some buyers are using contingency periods—such as during inspections or appraisals—as exit ramps when better or more affordable listings come up. Others are backing out when confronted with unexpectedly high monthly payments after a deeper review of rate locks or lender estimates. Broader concerns about the economy, inflation, and job security are also feeding buyer caution.
Real estate analysts interpret this surge in cancellations as a sign that the market is becoming more favorable for buyers. With more inventory and less urgency to act quickly, prospective homeowners feel increasingly empowered to negotiate—or walk away—if the terms aren’t ideal.
Looking ahead, home prices are expected to soften modestly. Current forecasts project a 1% year-over-year price decline by the end of 2025. That shift, combined with steady mortgage rates in the high-6% range, could lead to further adjustments in buyer behavior and seller strategy.
For buyers, the emerging environment presents opportunity—but also risk. The rise in inventory means more choice, longer decision windows, and the potential for stronger negotiating positions. However, affordability remains constrained, and any unexpected rate hikes could further complicate buying decisions.
Sellers, on the other hand, are finding it harder to command top dollar. Price cuts, seller concessions, and extended time on market are becoming more common. In response, many real estate professionals are advising sellers to price homes more realistically from the start, invest in competitive staging, and remain flexible on terms to minimize the risk of deal fallout.
Ultimately, the housing market is recalibrating. After years of tight supply and fast-paced sales, the return of available homes and a spike in cancellations suggest buyers are reclaiming leverage. But with elevated rates still casting a long shadow, both sides of the transaction need to proceed strategically.
