More home purchase contracts are falling apart right now, and that is making a lot of homeowners nervous.

When people hear that more buyers are backing out of deals, the first reaction is usually fear. They start asking whether the market is crashing, whether buyers are disappearing, or whether something is seriously wrong with the housing market.

But the data tells a more balanced story. Nationally, contract cancellations are up, and Phoenix and Chandler are also seeing a higher number of homes fall back on the market. At the same time, buyers are still writing offers and putting homes under contract every week. What has changed is not that demand disappeared. What changed is buyer behavior.

In this market update, we are going to break down what the numbers show nationally, what is happening here in Phoenix and Chandler, why more contracts are getting cancelled, and what sellers can do to reduce the chances of their deal falling apart.

Key Market Highlights

Contract cancellations are at the highest January level in years

According to Redfin data, about 13.7% of pending home sales fell out of contract in January, which is the highest January cancellation rate in nearly a decade. That means roughly 1 out of every 7 deals failed before closing.

Phoenix cancellations are up, but still within the normal historical range

In the Greater Phoenix market, about 2,159 homes went under contract while around 367 homes fell back on the market. That is on the higher side compared to quieter years, but it still falls within the normal range Phoenix has seen historically.

Chandler is seeing the same pattern on a smaller scale

In Chandler, about 83 homes went under contract while around 18 homes fell back on the market. That is slightly elevated compared to a typical weekly range of 8 to 15 cancellations, but still within the market’s normal fluctuation range.

Buyers are still active, but much more selective

The increase in cancellations does not mean buyers are gone. It means they are being more cautious with inspections, financing, repairs, and overall deal terms before they commit to closing.

Today’s market is more balanced than it was in 2021 or early 2022

During the hot market, buyers were waiving inspections, bidding aggressively, and pushing deals through quickly. Today, buyers are negotiating more carefully, and that naturally causes more contracts to fail during escrow.

Most deals fall apart for a few predictable reasons

The most common reasons contracts fail are inspection problems, financing issues, low appraisals, and buyer hesitation. In many cases, these problems can be reduced through better pricing, stronger preparation, and smarter negotiation.

Sellers can reduce cancellation risk with the right strategy

Pricing the home correctly, preparing the home before listing, evaluating buyer strength carefully, and managing the inspection period the right way can significantly reduce the risk of a cancelled contract.

Buyer & Seller Insights

National cancellations are rising, but this does not automatically mean the market is crashing

The headline number is real: cancellations are higher than they used to be. But higher cancellations alone do not prove that the market is collapsing.

What it really shows is that buyers are behaving more cautiously than they did during the most competitive years. They are reading inspections more carefully, reviewing financing more closely, and making sure the numbers work before they move forward.

For sellers, that means today’s market requires more discipline and preparation. For buyers, it means there is more room to protect yourself during the escrow process.

Phoenix is seeing more fallouts, but demand is still active

Phoenix is currently seeing more homes fall back on the market than during quieter periods in 2023 and 2024. But the bigger picture matters.

If around 2,159 homes are still going under contract while 367 are falling out, that tells us buyers are still very active. The market is not frozen. Instead, it is functioning more like a normal, balanced market where not every deal automatically makes it to the finish line.

That is an important distinction for both buyers and sellers.

Chandler is still active, even with slightly higher cancellations

Because Chandler is a smaller market, its numbers are naturally lower. But the pattern is similar.

Weekly cancellations in Chandler typically fall somewhere between 8 and 15 homes. Seeing 18 cancellations is a little high, but still within the range Chandler has shown before, especially during active spring periods.

At the same time, 83 homes still went under contract that week. That means buyers are still showing up. They are just more selective than they used to be.

Why contracts are falling apart more often today

There are several common reasons a deal can fail in the current market.

Inspection issues are one of the biggest. Buyers today are paying closer attention to the condition of the home, and if major problems show up with the roof, HVAC, plumbing, or foundation, they may walk away.

Financing is another issue. Even with a pre-approval, final underwriting can uncover documentation or income problems that stop the deal.

Low appraisals can also create problems. If the property appraises below the contract price, buyers may not want to bring more cash to closing.

And finally, some buyers are simply hesitating. With rates still much higher than the ultra-low levels of 2021, some people pause during escrow and reconsider whether the home still makes sense financially.

What sellers can do to reduce the chance of cancellation

The best way to reduce deal fallout is to prepare before problems show up.

First, price the home correctly. Overpriced listings often attract buyers who later realize the numbers do not work and try to renegotiate or back out.

Second, prepare the home before listing. If there are known repair issues, dealing with them up front can reduce surprises during the inspection period.

Third, evaluate the strength of the buyer, not just the price in the offer. A higher offer is not always the safest offer. Financing type, down payment size, documentation strength, and overall closing risk matter.

Fourth, manage the inspection period carefully. A large number of contracts fall apart during this window, so how repairs and credits are negotiated can determine whether the deal survives.

Why local Chandler strategy matters

This is where local experience becomes especially important.

Not every Chandler neighborhood behaves the same way. Buyer demand, pricing behavior, and financing patterns can vary by location, condition, and price range.

That means the best way to reduce cancellation risk is not just to “put the home on the market.” It is to launch the listing with the right pricing strategy, the right presentation, and the right negotiation approach from the beginning.