U.S. homebuyers walked away from purchase contracts at a record-setting pace in February, as surging inventory and lingering economic jitters put buyers firmly in the driver’s seat.

More than 42,000 home-sale agreements fell through last month, representing 13.7% of all homes that went under contract during the month, according to a recent report from real estate brokerage Redfin. Up from 12.8% in February 2025, the figure marks the highest cancellation rate for the month of February since the company began tracking the metric in 2017 — slightly beating January’s cancellation rates.

The driving force behind this near 1 in 7 failure rate is a rapidly widening inventory gap. With hundreds of thousands more sellers than buyers active in the national market, house hunters are feeling increasingly empowered.

Rather than compromising, buyers are leveraging inspection contingencies to demand major repairs, closing cost credits or outright price reductions. When sellers refuse to negotiate, buyers are simply walking away, knowing they have ample alternatives on the market.

The wave of broken deals is highly concentrated in the South, where pandemic-era building booms had led to a pronounced surplus of inventory.

Tampa, Fla., led the nation with an 18.1% cancellation rate in February, according to Redfin. San Antonio and Atlanta followed closely behind, with both posting a cancellation rate of 17.9%. In these metros, the sheer volume of active listings — given the glut in inventory — has reduced the risk of walking away from a deal, as buyers can easily find comparable properties.

Conversely, the data reveals a stark contrast in the nation’s most competitive markets, where sellers maintain the advantage. Metros with heavily constrained inventory saw buyers holding tight to their contracts, fearing their inability to find or afford a more suitable home if they backed out. 

For example, San Francisco — one of the nation’s priciest markets — posted a cancellation rate of just 3.7%, while Nassau County, N.Y., another coveted area, recorded a 4.5% rate, per Redfin’s data.

Beyond local supply and demand dynamics, broader macroeconomic headwinds are contributing to buyers’ cold feet. Mortgage rates have been volatile in early 2026, briefly dipping below 6% before climbing back up following the start of the Iran war. This rate instability, combined with broader geopolitical and economic uncertainty has made buyers “jittery,” Redfin noted.