The latest sign of trouble in the U.S. housing market: a pickup in home purchase agreements falling through before they’re finalized.

Some 6% of pending contracts to buy a home were canceled in May, down from 7% in April, but up from 5% in May last year, according to data from National Association of Realtors. May is the third consecutive month with an annual increase in pending home sales cancellations.

A separate analysis by Redfin found that 14.6% of all pending sales in May fell out of contract, up from 14% in May 2024.

The trend underscores how even buyers who manage to ink a deal with a seller might back out because of unexpected costs, or changes in their credit or employment, among other reasons. — Associated Press