I have been seeing a lot of articles about home sales falling through, such as one yesterday from Newsweek that headlined “Number of Home Sales Falling Through Hits Record Level”. Keep in mind when you read national headlines that they are referring to the whole country, and local markets can vary. I was surprised when I read this headline, and dug into our local market.
When a sale falls through, most of the time it comes back on the market looking for another buyer. I have been tracking the weekly ‘Back on the Market’ listings since 2011, and don’t see a significant change… of course we don’t have a crystal ball to see what will happen in the future. What I did notice was that there has been an increase in ‘Back on the Market’ listings in July most years, with last year peaking higher than this year so far.
There also is typically an increase in price reductions in July, likely as sellers want to entice buyers to make an offer and close by fall.
The press is reporting that the number of homes for sale in the United States rose nearly 30% year-over-year in June, indicating we are moving into a buyer’s market. Keep in mind these are national numbers… the Twin Cities reported a 2.0% year-over-year inventory increase in June 2025. Only prices over $1M are in a buyer’s market in the Twin Cities.
What I do find to be true is that buyers are more hesitant to commit because of current economic uncertainties.
Reasons for waiting or backing out?
- Inspection – buyers may find it easier to cancel following the inspection if there is something they don’t want to deal with or if another home comes on the market they like better
- Increased insurance costs – Minnesota homeowner’s insurance costs increased 15% this year, buyers may be surprised when they get a quote for their new home
- Finances – economic uncertainty regarding jobs, impact of tariffs, inflation, possibility of a recession
- Waiting for mortgage rates to decline
According to Redfin, about 15% of US houses under contract in June canceled, up from 14% last year. The highest cancellation rates are in the SunBelt. According to patch.com, more than 10% of pending homes sales in the Twin Cities fell through in June.
Concerned about another housing market crash? Forbes states that is highly unlikely. Today’s homeowners are on a much more secure footing than in 2008, with many having substantial home equity. However, two primary conditions must improve for a healthier housing market: housing inventory needs to increase and mortgage rates need to fall.
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.com
