Buyers are canceling contracts and walking away in record numbers – new data shows a sharp turn in the housing market

Housing analyst Nicholas Gerli says the U.S. housing market has taken another ugly turn, and this time the warning sign is not just rising inventory or stale listings. It is buyers walking away after already going under contract.

In his latest Reventure Consulting video, Gerli points to new Redfin data showing that nearly 14% of pending home sales in February 2026 were canceled. According to him, that is the highest contract cancellation rate in Redfin’s records going back a decade.

That number matters because pending sales are supposed to be near the finish line. These are deals that already looked real enough to get into escrow, move through financing, and head toward closing. But now, Gerli says, nearly one in seven of them is falling apart.

His read on it is simple. Buyers are getting cold feet because the market has shifted, affordability is still brutal, and people no longer feel pressure to overcommit. In his words, this is proof that the ground is moving under the housing market.

That may sound dramatic, but the cancellation spike is hard to dismiss. When buyers start backing out at record levels, it usually means confidence is cracking before prices fully catch up.

The Pullback Is Widespread, But Worst In The Sun Belt

Gerli says the cancellation surge is not evenly spread across the country. Some markets are being hit much harder than others.

He highlights Tampa, San Antonio, Fort Worth, Atlanta, and Jacksonville as among the cities with the highest contract cancellation rates. In some of these markets, he says, the rate is getting close to one in five pending deals falling through.

That is a staggering figure. A pending sale used to signal momentum. Now, in some of these cities, it may just mean the house could be back on the market a few weeks later.

Gerli quotes a Redfin agent in Florida who said buyers are canceling contracts “left and right.” According to that agent, some buyers make offers and then never even send the deposit because they get nervous. Others revisit the numbers with lenders and decide they no longer feel comfortable moving forward.

That tracks with the broader mood Gerli describes throughout the video. This is not a market where buyers feel urgency. It is a market where buyers feel exposed.

And once fear starts creeping into pending sales, the whole market can start to wobble. Deals that looked secure suddenly become optional.

The Monthly Payment Shock Is Still Driving The Decision

Gerli spends a big chunk of the video walking through a neighborhood north of Nashville to show why so many buyers are backing out. He points to new townhomes and homes under construction selling from the high $300,000s into the low $400,000s.

One example he gives is a three-bed, three-bath, roughly 1,700-square-foot townhome listed around $392,000 to $430,000. He says the payment on one of those homes would run around $2,800 to $2,900 a month with a mortgage.

That is where he thinks many buyers hit the wall. They do the math, then they compare it to renting.

According to Gerli, homes for rent in that same area can be found for around $1,900 a month. That means the cost to buy is dramatically higher than the cost to rent, and he says the national buy-versus-rent gap is now over 40%.

That number alone explains a lot of the hesitation. People may want a house, but if ownership means paying hundreds more each month than renting the same kind of place nearby, the decision starts looking less like an investment and more like a risk.

Gerli’s argument here is pretty convincing. A lot of buyers are not canceling because they suddenly hate owning property. They are canceling because the payment no longer feels justifiable once the excitement wears off and the spreadsheet comes out.

That is a much more dangerous kind of market shift than a simple slowdown. It suggests the math itself is failing to support the sale.

Builders Are Turning Up The Pressure On Existing Sellers

Another major theme in Gerli’s report is the role builders are playing in pushing values down in certain neighborhoods. He argues that in areas with a lot of new construction, builders are undercutting existing sellers and making it harder for older listings to hold the line.

He points to one example in the Nashville-area zip code he was visiting. A flipped house sold for $475,000 back in 2022 and is now back on the market at $500,000. The seller is trying to get more than $329 a square foot.

The problem, Gerli says, is that builders nearby are offering brand-new floor plans in the same neighborhood for about $392,000. Those homes, he says, are bigger, newer, and in some cases offer more bedrooms, all while coming in roughly $100,000 cheaper and closer to $200 a square foot.

That is the kind of comparison that can break a resale listing fast. Buyers looking at both options are naturally going to wonder why they should pay more for the older house.

Gerli says this kind of builder competition is good news for buyers because it can improve affordability and create leverage. Builders can cut prices, offer mortgage-rate buydowns, and keep sweetening the deal in ways many individual sellers cannot.

But for existing owners, especially those trying to hold onto 2022-style pricing, this is where reality starts to hurt. Gerli says many sellers still have not fully realized how much the market has changed.

That feels right. A lot of homeowners still seem mentally anchored to peak-era pricing, even as nearby new construction quietly resets the neighborhood lower.

Redfin’s Bigger Message Is That Buyers Now Have The Leverage

Gerli keeps returning to one main conclusion from Redfin’s report: buyers are now in the driver’s seat in many markets. He says Redfin directly acknowledged that there are hundreds of thousands more sellers than buyers in the country right now, creating a near-record gap that gives buyers more options and more negotiating power.

That is a huge shift from the frenzy market of just a few years ago. Then, buyers were waiving contingencies, rushing offers, and stretching budgets because they were afraid of missing out.

Now, according to Gerli, the fear has moved. It is sellers who should be nervous.

He argues that this new balance of power is why so many buyers are willing to walk away. They know there are other homes out there. They know inventory is rising. They know some sellers are cutting prices and some builders are getting more aggressive.

In that environment, backing out does not feel like failure. It feels like patience.

Gerli also says buyers are becoming more aware that a downward forecast can actually be good news for them. If values are projected to slip in a given zip code, that means more negotiating room and more chance to land below-list deals.

That is not exactly a bullish message for the housing market overall, but it is an honest one. In a correcting market, the people with cash, financing, and patience tend to gain leverage while everyone else scrambles to protect yesterday’s price.

Labor Market Fear Is Making The Problem Worse

Gerli does not blame affordability alone. He also says economic anxiety is creeping into the housing picture in a bigger way this year.

He points to Redfin survey data showing that 59% of Americans believe advances in artificial intelligence will eliminate jobs and make it harder for people to afford homes. In his telling, that fear is becoming another headwind, especially for white-collar workers worried about layoffs, wage stagnation, or reduced long-term job security.

He also mentions companies like Block and rumors involving Meta to argue that more people are starting to wonder whether their job will still be around in a few years or whether raises will keep pace with the cost of housing.

That kind of uncertainty matters because housing is a confidence purchase as much as a financial one. People do not just buy based on today’s paycheck. They buy based on what they think their life will look like in the years ahead.

If they stop trusting that future, they hesitate.

Gerli’s view is that this job-market fear is now layering on top of already-high mortgage payments and still-elevated prices. Add in geopolitical instability and higher rates, and you get a buyer pool that is much quicker to panic.

That feels like a key reason cancellations are rising instead of just sales slowing. Buyers are not simply waiting longer. Some are moving forward, then rethinking the entire purchase once the risk starts to feel more real.

Sellers May Still List High, But The Market Has Already Changed

One of Gerli’s most useful points is that buyers should not take list prices too seriously anymore. He argues that the sticker price on a house is often just a starting point, especially when a seller has been sitting for months, cutting repeatedly, or playing games by relisting to reset the clock.

He says “true days on market” is one of the most important signals to watch because sellers and platforms can make a stale listing look fresh by taking it down and putting it back up. A home that appears to have been listed for 18 days may actually have been struggling for 100 days or more.

That matters because desperation usually builds in silence before it shows up in the asking price.

Gerli’s larger message is that a lot of sellers still want to sell, even if they are pretending otherwise. If they have been stuck for a long time, if they bought at a bad moment, if they are carrying a higher payment than they want, the odds of a deal improve.

His advice is not to throw ridiculous offers around carelessly, but to understand that this is now a market where counteroffers, rejected offers, and long negotiations are all part of the process again.

That alone shows how different things are from the boom years.

This Is What A Market Turn Actually Looks Like

Gerli describes the current housing market as a “bloodbath,” and while that is clearly his headline language, the underlying point is real enough. Record cancellations mean people are no longer just hesitant. They are actively reversing course after getting deep into the process.

That is not a small behavioral change. It is one of the clearest signs that confidence is eroding.

His argument, stripped of the sales pitch and the app plugs, is basically this: prices stayed too high for too long, payments remain punishing, builders are adding pressure, and buyers now know they do not have to force a deal.

That is what a market turn often looks like before the bigger numbers fully show it. Deals fail. Homes come back. Sellers cut. Buyers wait. Confidence weakens before price charts finish telling the story.

And that is why the Redfin data matters so much. It is not just another statistic. It is a snapshot of a market where more and more buyers are looking at the contract in front of them and deciding it is safer to walk away.