December Housing Market News: Record Contract Cancellations & What It Means for You

What happened with pending home sales in December — and why real estate contracts fell apart at rates we haven’t seen in years?

December 2025 delivered surprising housing market data: there was a sharp drop in pending home sales and a record share of contracts falling out of contract — meaning buyers and sellers who previously agreed to terms walked away from deals before closing. These trends have big implications nationally and right here in Sherman, Denison, and the greater North Texas market.

📉 National Pending Sales Slowed in December After Strong Activity

New data from the National Association of REALTORS® (NAR) shows that pending home sales — contracts signed but not yet closed — dropped 9.3% in December 2025 compared with November and about 3% below December 2024 levels.

While winter typically slows real estate activity, this year’s drop was steeper than expected, especially after encouraging contract activity earlier in 2025. The entire U.S. market saw this dip, signaling a broader shift in buyer behavior.

⚠️ A Record Share of Deals Came Unplugged

Redfin’s latest data reveals that more than 40,000 pending home contracts were canceled in December — the highest number ever recorded for that month. Roughly 16.3% of all deals nationally were canceled, up from 14.9% the year prior.

So what’s causing buyers and sellers to back out?

• Higher home prices and still-elevated mortgage rates are pushing buyers to rethink affordability.

• More inventory gives buyers more choices — and more willingness to walk away if the deal doesn’t feel right.

• Inspection and financing contingencies are being used more aggressively to renegotiate or cancel deals.

This isn’t necessarily a red flag for the housing market — but it is a sign that buyers are being more cautious, more selective, and more strategic.

🏡 Local Perspective: Sherman & Denison Are Feeling the Shift Too

Here in Sherman, Denison, and the North Texas market, we’re already seeing some similar trends taking shape:

• Buyers have more room to shop around, and deals are moving at a steadier — not rushed — pace.

• Sellers may need to adjust pricing expectations and prepare for more scrutiny during inspections.

• More homes are returning to market after deals fall through, giving savvy buyers a second chance.

The growth in our area, especially around infrastructure, manufacturing, and new development in Grayson County, continues to draw new interest. But today’s buyers aren’t jumping in blindly — they’re watching rates, negotiating harder, and ensuring the numbers work.

💡 What This Means for You in 2026

Whether you’re buying or selling in North Texas, this moment presents both risk and opportunity:

• Buyers: You may have more leverage than you did in early 2025. But with competition likely to ramp up in spring, this could be your ideal window to secure a deal.

• Sellers: Focus on accurate pricing and clean presentation. The goal is not just to attract offers — but to get them across the finish line.

🎯 Final Takeaway

December’s national market data tells a clear story: pending home sales are down, and more deals are collapsing before closing than ever before. That’s a trend you can’t afford to ignore — whether you’re casually browsing or actively preparing to list.

In Sherman and Denison, the market remains active — but today’s environment calls for a smarter, more strategic approach.

Have questions about navigating today’s real estate market?

Reach out anytime — I’d love to help you make sense of the current landscape and make your next move with confidence.