The housing market enters 2026 with a power shift toward buyers. New data reveals a landscape where purchasers are walking away from deals at record rates, even as specific metropolitan areas emerge as prime targets for value and appreciation.
Recent reports by Zillow and Redfin paint a complex picture of the new year. After years of tight inventory and high competition, Zillow’s latest analysis suggests the market is settling into a “healthier state” where buyers have more breathing room.
However, Redfin data shows that this leverage is being used aggressively: Home purchase cancellations hit a record 16.3% in December, the highest percentage since Redfin began recording this data in 2017.
Cities like Atlanta and Jacksonville, Fla., lead rankings from both real estate listing companies, ranking as the best markets for buyers while simultaneously leading the nation in deal cancellations, suggesting that while options are growing, affordability constraints continue to make closing deals difficult, contributing to lower rates of homeownership among younger demographics.
Indianapolis took the top spot in Zillow’s 2026 ranking of “buyer-friendly” markets, followed by Atlanta, Charlotte, N.C., Jacksonville and Oklahoma City.
According to Zillow, these markets offer the best combination of affordability relative to local incomes, forecasted home value appreciation and reduced competition. For instance, in Indianapolis — the No. 1 ranked market — a typical buyer spends about 26.9% of their median household income on a mortgage, significantly lower than the burden in costlier coastal metros.
“The ranking is designed to highlight places where buyers are more likely to find a balanced mix of opportunity and sustainability,” Zillow reported. The listing platform’s methodology emphasizes markets where buyers face less risk of bidding wars and have more time to make decisions.
But Redfin’s data highlights how buyers are becoming increasingly selective. Roughly 40,000 purchase agreements were canceled in December, representing 16.3% of all homes that went under contract.
“High housing costs and rising inventory have made homebuyers more selective,” said Chen Zhao, head of economics research at Redfin, in the report. “Home sellers outnumber buyers by a record margin, meaning the buyers who are in the market have options and may walk away if they believe they can find a better or more affordable home.”
The data reveals a striking correlation between buyer-friendly markets and deal volatility. Atlanta, ranked as the second-best market for buyers by Zillow, experienced the nation’s highest cancellation rate at 22.5%, according to Redfin. Similarly, Jacksonville appeared in the top five for both favorable buying conditions and high cancellation rates.
This overlap suggests that in early 2026, a buyer-friendly market is not necessarily an easy one for closing transactions. Instead, these are markets where inventory has risen enough to give purchasers the confidence to walk away from imperfect deals.
Looking ahead, Redfin economists expect affordability to “gently improve” throughout 2026 as wages rise faster than housing costs, potentially stabilizing the cancellation rates as the year progresses.
