The Record-High Fallout Rate Is Your Signal: Why Smart Buyers Move First in 2026
If it feels like buyers are suddenly getting cold feet, you’re not imagining it.
Nationally, deal fall-throughs just hit a record high for December: 16.3% of homes under contract were canceled (roughly 40,000 deals) per Redfin’s latest analysis.
That number doesn’t happen because everyone collectively “changed their mind.” It happens when buyers run head-first into reality:
- Payments are higher than they expected
- Job security feels shakier
- Rates moved down a little… but not enough to make the math painless
- Affordability is still the boss fight
And here’s the part most people miss: this kind of hesitation creates a window. Not for reckless buyers. For prepared buyers.
Why buyers are backing out at record levels
1) The payment shock is real
A small shift in rate doesn’t always translate to a meaningful monthly change, especially when prices are still elevated and taxes/insurance are doing their own thing.
As of late January 2026, the average 30-year fixed mortgage rate is around 6.10% (Freddie Mac). That’s down from about a year ago, but it’s not a “back to 3%” world.
So buyers walk in thinking, “Rates came down, we’re good,” then the lender runs the numbers and the payment says: absolutely not.
2) Uncertainty kills urgency
When people feel unsure about work, the economy, or the next big headline, they delay big decisions. That hesitation shows up as:
- slower offers
- more contingencies
- more “let’s see what happens”
- more cancellations
Redfin’s cancellation spike is basically uncertainty made visible.
3) Buyers have leverage again, and they’re using it
This is the quiet story underneath the panic: sellers are negotiating more in many places.
In 2025, Redfin reported 60% of buyers paid below asking price, the highest share in over a decade, with meaningful average discounts. That doesn’t mean “cheap homes.” It means more room to negotiate if you’re disciplined.
The sophisticated-buyer play: act while everyone else hesitates
Most buyers wait for the perfect moment:
- rates magically drop
- prices magically drop
- competition magically disappears
That moment doesn’t exist.
What does exist is a predictable cycle:
- Market softens a bit because buyers hesitate
- Serious buyers step in and negotiate better terms
- Rates drop further (even modestly) and sidelined buyers rush back in
- Competition increases again and leverage shrinks
If you’re a buyer with solid income, stable savings, and the ability to think 6–18 months ahead, you don’t wait for the crowd.
You buy when:
- sellers are more flexible
- fewer buyers are swinging at everything
- you can negotiate inspections, concessions, and closing terms without getting laughed out of the room
Then you refinance later if rates move your way.
What this looks like in Western New York
Western New York doesn’t always behave like the national headlines, but the themes still show up.
Buffalo’s prices are still moving, and homes are still going pending quickly in many neighborhoods:
- Redfin shows a median sale price around $215K in Buffalo (Dec 2025), up year-over-year, with homes selling in about three weeks on average.
- Zillow’s index also shows Buffalo values up year-over-year (low-to-mid single digits) and pending times in the teens for days.
- BNAR market snapshots in 2025 show median prices rising while inventory improves somewhat from ultra-tight levels.
Translation: WNY is still relatively affordable compared to many U.S. markets—but that affordability is exactly why demand doesn’t disappear. It just pauses.
So when buyers come back (and they will), WNY tends to feel it faster than people expect.
How to “act now” without being reckless
If you want the upside of this moment without the regret, do these things:
Get brutally clear on your payment
Not what you hope to pay. What you can comfortably pay, even if life gets annoying.
Target sellers who are ready to deal
Look for listings with:
- longer days on market
- price reductions
- “motivated seller” language
- homes that are solid but not trendy
That’s where concessions live.
Negotiate like it’s your job
If the home inspection reveals real issues, you don’t “eat it” just to be nice. You renegotiate. This market supports it more than the last few years did.
Buy the house you can afford now, refinance later
Nobody buys at the perfect rate. The win is buying the right home at the right terms, then improving the rate when the opportunity appears.
Bottom line
A record-high cancellation rate isn’t just a scary stat. It’s the market telling you something:
A lot of buyers are showing up unprepared, getting punched by the payment, and running.
If you’re prepared, this is when you can:
- negotiate harder
- choose more carefully
- avoid bidding-war chaos
- and get ahead of the next wave of buyers
When the crowd returns, the window closes.
If you’re thinking about buying in Western New York and want a straight answer on what you can realistically do right now, connect with Great Lakes Real Estate. We’ll help you run the numbers, spot the traps, and move when it actually makes sense.
Call (716) 754-2550 or visit us at www.greatlakesrealestate.com
