Real Estate Market Cooling Off Nationwide—But Not In NJ

New Jersey is standing out from the crowd in a housing market that is increasingly showing signs of cooling, according to a new report.

National trends show buyers are backing out during the inspection period because a better home comes along in what is largely a buyer’s market, and some are nervous about making a major purchase in uncertain times, the online real estate company Redfin said.

Overall, 14.9 percent of pending home sales fell through in June, up from 13.9 percent a year earlier. That’s the highest June share since Redfin began keeping records in 2017.

In New Jersey, about 11.3 percent of pending home sales in New Brunswick, and 10.4 percent in Newark fell through in June, a signal the housing market is staying largely stable in the state. In June 2024, 11.2 percent of New Brunswick home sales and nine percent in Newark fell through in June, according to the report.

Redfin analyzed the top 50 most populous metro areas in the United States, and narrowed that further to the 44 with sufficient enough data for their report.

Redfin’s analysis is based on multi-listing service pending-sales data. Typically, the highest shares of cancellations are at the end of the year and in the spring, according to Redfin. The housing market in June is a more reliable measure of buyer sentiment.

Redfin said pending home sales are also falling through at a higher rate than in the past because it’s a buyer’s market, with hundreds of thousands more home sellers than buyers. Buyers have room to be picky, Redfin said, and may back out during the inspection period if a better home comes up for sale, or they discover an issue they don’t want to fix.

Finances are the other major reason buyers are backing out of deals. U.S. home-sale prices are at record highs, and while monthly mortgage payments have fallen a bit, they’re still near their all-time high. Some would-be buyers are canceling purchases when the reality of their monthly payment sets in, Redfin said.

Additionally, Redfin agents report that some buyers are canceling because they’re nervous about economic uncertainty surrounding things like tariffs, inflation, and the possibility of a recession.

“Buyers have leverage,” said Crystal Zschirnt, a Redfin Premier agent in Dallas. “Some buyers are canceling deals because another home pops up in the same price range that they like better, or because they discover a flaw and get nervous it’ll cost too much to fix. I’ve also heard of some buyers backing out because they’re hoping home prices or mortgage rates are going to plummet soon, even though that’s unlikely.”

Redfin previously forecast a 1 percent year-over-year decline in home prices nationwide by the end of 2025. Mortgage rates are expected to remain essentially unchanged in the 6.8 percent range.

In some cases, sellers are working hard to keep transactions from falling apart.

“Sellers are willing to make deals because in today’s buyer’s market, they don’t want to lose out on a sale once they have a buyer under contract,” said Van Welborn, a Redfin Premier agent in Phoenix. “A few years ago, when the market was more competitive, sellers were able to tell buyers to move on rather than pay for repairs found during the inspection period. Now, sellers are doing whatever they can to close the deal. I have one buyer who discovered a septic issue on an ultra-luxury home and was able to talk the seller into reducing the price by $1 million.”

Overall, the highest cancellation rates are in the Sun Belt. In Jacksonville, Florida, more than one in five (21.4 percent) home-purchase agreements were canceled in June, the highest share of 44 major U.S. metros Redfin analyzed. It’s followed by Las Vegas (19.7 percent) and Atlanta (19.6 percent).

Others with high cancellation rates were San Antonio, Texas; Tampa, Florida; Orlando, Florida, Riverside, California; Phoenix; Fort Worth, Texas; and Miami.

New construction in Florida and Texas is leading to high cancellation rates because there’s a greater inventory of houses for buyers to consider, according to Redfin. Also, the real-estate company said, some areas are backing out because of high insurance quotes related to the increasing frequency of natural disasters.

On the other end of the spectrum, just 5.4% of home-purchase agreements in Nassau County, New York, were canceled in June, the lowest share of the metros Redfin analyzed. It’s followed by Montgomery County, Pennsylvania (6.8 percent), and Milwaukee (8.2 percent).

The biggest year-over-year increases in contract cancellations are in California: In Anaheim, 15.2 percent of deals were canceled, up from 12.6 percent, and in Los Angeles, 17.1 percent were canceled, up from 14.7 percent.

The share of home-purchase cancellations fell year over year in June in just seven of the metros in this analysis, all by about 1 percentage point or less. The biggest decline was in Fort Lauderdale, Florida (16.5 percent, down from 17.7 percent), followed by Denver (16.2 percent, down from 17.2 percent), and Orlando, Florida (19 percent, down from 19.9 percent).