Redfin’s May 2026 housing‑market analysis paints a clear picture of where home‑sale contracts are most likely to fall apart in the United States. The data show that the highest cancellation rates are concentrated in Atlanta, Georgia, and a cluster of Sun‑belt metros across Texas and Florida, where roughly one‑in‑five pending sales—about 18 %—were terminated. At the national level, the cancellation share has held steady at 13.6 % for the fourth month in a row, suggesting that buyers and sellers have largely adapted to the higher‑rate environment that has persisted since late 2022. This stability masks pronounced regional differences: while some metros are experiencing buyer‑dominated markets with abundant inventory, others—particularly on the West Coast and in the Northeast—continue to see low cancellation rates because of tight supply and strong buyer demand. Understanding these dynamics is essential for anyone monitoring housing‑market health, mortgage‑lending risk, or regional economic trends.
Redfin’s May 2026 Cancellation Findings
Redfin, the technology‑driven brokerage owned by Rocket Companies, released a metro‑level breakdown of pending home‑sale agreements that were terminated in May 2026. Among the 50 most populous U.S. metros with sufficient data, Atlanta posted the highest share of cancellations at 18.8 % of pending sales. Four other southern metros followed closely: Fort Worth, TX (18.1 %), Jacksonville, FL (17.9 %), San Antonio, TX (17.8 %) and Orlando, FL (17.7 %). Texas contributed four of the ten metros with the highest cancellation rates, while Florida accounted for three, underscoring the breadth of the buyer‑favored shift across the Sun Belt.
The report also highlighted the broader national picture: 13.6 % of all May home‑sale contracts were cancelled, unchanged from the previous month on a seasonally adjusted basis. This figure has remained flat for four months and has hovered between 13.4 % and 14 % over the past two years, indicating a new equilibrium after the volatility of the pandemic‑era boom.
Redfin’s data table lists the top ten metros by cancellation share, the month‑over‑month change in percentage points, and the year‑over‑year change. Notable month‑over‑month increases occurred in Portland, OR (+2.0 pts to 16.3 %) and Oakland, CA (+2.0 pts to 10.2 %), suggesting that even traditionally balanced markets can swing toward buyer power when inventory rises. The most pronounced decline was in Columbus, OH (‑2.1 pts to 15.1 %), reflecting a localized tightening of supply or a shift in buyer sentiment.
Beyond the headline numbers, the source provides additional context that helps explain why these metros are at the top of the list. For example, Phoenix, AZ (17.6 %), Tampa, FL (17.1 %), Dallas, TX (17.0 %), Detroit, MI (17.0 %), and Houston, TX (16.9 %) all posted cancellation rates above 16 %, reinforcing the pattern that many Sun‑belt and Mid‑west metros are now operating with sizable seller surpluses.
Buyer‑Dominated Markets and Seller Surpluses
The concentration of cancellations in Atlanta and other Sun‑belt metros reflects a shift from the “red‑hot seller’s market” of 2020‑2022 to a buyer‑favored environment. In Atlanta, there are 70 % more home sellers than buyers; Fort Worth’s surplus stands at 61 %, Jacksonville’s at 74 %, and both San Antonio and Houston have more than twice as many sellers as buyers. These imbalances give buyers the confidence to back out of contracts, knowing alternative inventory is readily available.
Redfin attributes the sustained cancellation rate to several intertwined factors:
- Mortgage rates have averaged above 6 % for nearly four years, tempering affordability and prompting many buyers to reassess their budgets. The source notes that the weekly average rate has been over 6 % since late 2022.
- Seller pricing strategies have evolved. Many sellers in these metros have begun pricing homes more competitively—often below the listing price—to attract offers. A Redfin Premier agent in Dallas, Connie Durnal, observed that “smart sellers” are listing below market value and negotiating aggressively, a practice that aligns with the broader buyer‑leaning trend.
- Pandemic‑era construction expanded housing supply dramatically in Sun‑belt cities. The source explains that the construction boom “skyrocketed to keep pace with demand,” but demand has since faded due to elevated rates, higher home prices, and rising insurance and HOA costs linked to natural‑disaster risk. The resulting surplus of inventory further empowers buyers.
These dynamics create a feedback loop: abundant inventory encourages sellers to lower prices, which in turn makes buyers more selective, leading to higher cancellation rates when a better option appears. The data also show that the cancellation rate has inched down from its 2023 peak, indicating that both parties are entering transactions with more realistic expectations.
Regional Contrasts and Emerging Trends
While cancellations dominate in the South and parts of the West, the opposite pattern persists in traditional seller’s markets. San Francisco recorded the lowest cancellation share at 3.9 % in May, followed by Nassau County, NY (3.9 %) and New York City (6.7 %). These metros benefit from a buyer shortage, reinforcing deal completion. The source adds that San Francisco’s market is buoyed by the AI boom, which sustains strong demand despite national softness.
The West Coast shows a mixed picture. Portland, OR experienced the fastest month‑over‑month rise in cancellations, climbing to 16.3 % from 14.3 % in April. Oakland, CA followed with a jump to 10.2 % from 8.2 %. Conversely, Columbus, OH and Cleveland, OH posted the steepest declines, suggesting localized adjustments in buyer sentiment or inventory dynamics. Additional metros with notable upticks include Houston (16.9 %, up from 15 %), Sacramento, CA (15.1 %, up from 13.2 %), and Pittsburgh (15.1 %, up from 13.9 %). Meanwhile, Miami, West Palm Beach, FL and San Antonio, TX saw modest declines after earlier spikes.
These regional variations underscore that the national cancellation rate can remain stable while individual metros swing dramatically based on local supply‑demand balances, mortgage‑rate sensitivity, and external pressures such as geopolitical turmoil or inflation risk. The source mentions that “house hunters are sometimes changing their minds due to financial instability caused by geopolitical turmoil, like the Iran war, and economic uncertainty, like inflation risk and lack of job security,” adding another layer to the buyer‑back‑out calculus.
Redfin’s analysis underscores that while the national cancellation rate has stabilized, regional volatility remains pronounced. Markets with pronounced seller surpluses continue to see higher cancellation frequencies, whereas metros with tight inventory maintain low cancellation rates. Monitoring these trends will be crucial for stakeholders who need to anticipate shifts in transaction volume, pricing pressure, and credit risk.
Key Takeaways
- Atlanta led May 2026 with an 18.8 % contract‑cancellation rate, the highest among the 50 most populous U.S. metros with sufficient data.
- Four Texas metros and three Florida metros ranked among the ten highest‑cancellation markets, reflecting pronounced seller surpluses (e.g., 70 % more sellers than buyers in Atlanta).
- The nationwide cancellation share held steady at 13.6 % for the fourth month in a row, unchanged from the prior month on a seasonally adjusted basis.
FinanceInsyte's Take
The persistence of a 13.6 % cancellation rate signals that the housing market has largely settled into a buyer‑favored equilibrium, especially in Sun‑belt metros where seller inventories outstrip demand. Financial institutions and mortgage lenders should monitor these regional imbalances, as they may affect loan pipelines and risk assessments. Uncertainty remains around how long elevated mortgage rates and supply‑side pressures will sustain the current cancellation levels, so ongoing data from Redfin and comparable sources will be essential for forecasting credit exposure and pricing strategies.
Source: Businesswire
