Buyer leverage is rising: Could it impact your closings?

The Westminster Kennel Club Dog Show is the second longest continuously held sporting event in the U.S. behind the Kentucky Derby. Last week at Madison Square Garden, Penny the Doberman pinscher was named Best in Show. She beat out six other finalists, becoming the 42nd female and fifth Doberman ever to win the top prize.

This week, home buyers are backing out of deals at record rates, apartment rents continue to drop to new lows, and inflation remains a sticky concern despite data delays.

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Bizz Buzz

Trend: Home buyers backing out of deals

More than 40,000 signed home purchase agreements were canceled in December 2025, according to Redfin. This represents 16.3% of all homes that went under contract and is up from the 14.9% seen in December 2024. This is also the highest percentage seen since Redfin began tracking this metric in 2017. With home sellers continuing to outnumber prospective buyers in the market, buyers have the option to walk away from a deal with the belief that they can find a better or more affordable home.

Apartment rents continue to drop

According to Apartment List, January saw a national median rent of $1,353, a decrease of 1.4% when compared to a year ago. This marks the fourth consecutive winter to experience an off-season dip. While annual rent growth was trending to flip positive for the first time since 2023, a slow summer moving season led to a stark reversal. With new apartment units continuing to come down the pipeline and supply not being an issue, potential renters maintain the pricing power over struggling landlords.

Caffeinated Trends

Data delays don’t stop the market

While the partial government shutdown caused delays of some marquee economic data points, like nonfarm payrolls, from government offices like the Bureau of Labor Statistics, some folks in the market are still focused on inflation.

The Producer Price Index (PPI) released a couple of weeks ago might give credence to those Federal Open Market Committee voting members who pointed to stubborn inflation as a justification to maintain higher interest rates for longer.

The PPI is a key indicator for financial institutions across the globe to understand the changes in pricing (inflation) for producers of goods and services – and spikes here, unless businesses decide to cut profits, can often translate to spikes in the Consumer Price Index (CPI).

Core PPI, shown above, strips out the more volatile food and energy prices to focus on the rest of the economy. This recent uptrend in prices on the producer side corresponds to the launch of broad-based tariffs by the United States in Q2 of 2025.

Through many Federal Reserve interest rate decisions in a row, the market has overpredicted how quickly the Fed would cut rates, and Powell and the other Fed governors have continued to take a data-driven approach as they’ve held rates “higher for longer.”

The focus continues to be on the Federal Reserve and if this narrative will change when Jerome Powell is no longer serving as chairman.

Rocket Pro on the Road

February 10: California Mortgage Expo, Palm Springs

February 17: Texas Mortgage Roundup, Austin

February 24: California Mortgage Expo, Sacramento

This week’s puzzle gets 4 Rockets out of 5.

4 Rockets

This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any service mentioned will meet their needs.