Cancellations cluster in markets with rising inventory and softening demand, often the Sun Belt metros that built the most new housing. Parts of the Southeast, Texas, and Florida frequently show up, because more supply gives buyers room to walk away and keep shopping. Where inventory is tight, fewer deals fall through, since buyers have fewer alternatives. A caution on the data: some widely quoted cancellation figures (Redfin publishes them, and other outlets pick them up) can be ambiguous about whether they count buyer cancellations, seller cancellations, or both. Read the methodology before treating a single scary percentage as gospel. The directional signal is what matters: higher-inventory, cooler-demand markets see more contracts fall apart. To gauge your own market, watch the local trend in active inventory and days on market. When both are climbing, expect more fall-throughs and more negotiating leverage. When they're tight, expect the opposite.