Homebuyers are backing out of deals in these five markets

The winter blues are hitting the housing landscape and buyers are ghosting the market by snapping up a home from the wealth of active inventory, then backing out after it’s gone under contract.And while the share of home sales falling out of contract this year looks much like last year, ending December at 7.1%, unchanged from a year earlier, according to Realtor.com data scientist Sabrina Speianu, there are five markets that are being hit the hardest.The largest percentage of buyers backing out of homes under contract are in Atlanta (10.3%), Las Vegas (10.1%), San Antonio, TX (9.6%), Riverside, CA (9.3%), and Phoenix (9.2%), according to Realtor.com data.This comes as sales of existing homes nosedived 8.4% in January—the slowest sales pace in more than two years, even as mortgage rates touched a three-year low of 6.09%.The last time there was a dramatic surge with deals falling through was in March 2020, when the housing market was hit by the effects of the pandemic.“In past periods when mortgage rates were rising—including 2018, 2022, and 2023—a higher share of homes returned to the market than we’re seeing today,” says Speianu.“Overall, contract cancellations appear to be more closely tied to sudden increases in borrowing costs than to periods when rates remain elevated but stable,” explains Speianu.There could be a number of reasons why buyers are breaking contracts, including finding another home that’s cheaper or locking in a lower mortgage rate.The Atlanta metro has a median list price of $400,000 and more than 23,000 active listings as of January, and this area leads the country with the number of contracts falling through at 10.3%.Bruce Ailion, a real estate professional and attorney with Re/Max Town & Country, tells Realtor.com he believes the significant inventory growth in the Atlanta region has contributed to buyers backing out.Ailion explains the standard Realtor promulgated purchase and sale agreement has a d...