Boston Home Sales Falling Through: July Hit Nearly 1 in 9

Here is a scene I have watched play out over and over this year. The basement of a two-family in Somerville, a weekday morning. The inspector has his flashlight up in the joist bays, and he is looking at cloth-wrapped wire running through porcelain tubes. Knob and tube, original to a house built around 1901. The buyer is standing behind him doing math she did not expect to be doing that week.

Run that same morning in 2022 and it never happens. Back then she wins that house by waiving the inspection outright, closes in September, and meets the wiring in November when her insurance carrier asks a question she cannot answer. Same house, same wire, same bill. The difference is that the 2022 version of that buyer had no way out and the 2026 version does.

That difference is most of the story behind the number everyone sent me last week. Redfin reported that 10.9 percent of Greater Boston home purchases fell through in July after going pending, up 170 basis points from a year earlier. The coverage treated it as a crack in the market. It is not. It is a mechanics story, and the mechanics are almost entirely preventable if you know which week of the contract they happen in.

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The number, and the number it is not

Start with scale, because the local figure only means something next to the national one. Nationally, Redfin counted 14 percent of July home-sale agreements falling apart, up from 13.7 percent in June and the highest share in nearly three years. Greater Boston came in at 10.9 percent, more than three full points below that.

The metro table is where the framing falls apart. Atlanta canceled at 19.8 percent, Houston at 19.6, San Antonio at 18.7, Las Vegas at 18.6, Orlando at 18.2. Those are Sun Belt markets carrying heavy new-construction supply. At the other end sat Nassau County, New York at 3.5 percent and San Francisco at 4.1 percent. Boston sits nearer the calm end of that distribution than the loud one.

One more piece of context that got left out of every writeup I read. The national cancellation rate has moved inside a band of roughly 13 to 14 percent for the last four years. This is a range-bound statistic that just touched the top of its range. It is not a new regime.

The causation almost everyone got backwards

Here is where I part ways with the coverage, including some of it written by people I respect.

The stories paired two facts. One, cancellations rose. Two, buyers now outnumber sellers in Boston again for the first time since spring. The implication was that the second caused the first, that a thicker buyer pool somehow hands buyers leverage to walk.

That gets the arrow exactly backwards. More buyers per seller is the definition of a tight market. It is competition among buyers, which is the thing that historically made Boston buyers waive protections rather than exercise them. Leverage comes from the opposite condition, a surplus of sellers, and that is precisely what the country has and Boston does not.

The numbers make it plain. Redfin estimated 12,404 buyers against 12,088 sellers in Boston in July, a buyer surplus of about 2.6 percent, which is close enough to even to call it a dead heat. Nationally there were 966,752 buyers against 1,462,921 sellers, meaning sellers outnumbered buyers by 51.3 percent, near a record. Roughly 39 of the 49 major metros Redfin tracks were buyer’s markets. Boston was not one of them.

If a buyer surplus caused cancellations, Nassau County would top the cancellation table. Buyers outnumber sellers there by about 36 percent, the tightest major market in the country. Nassau has the lowest cancellation rate in America at 3.5 percent. The relationship runs the other way.

So Boston’s 170 basis points needs a different explanation. I think there are three, and only one of them is really about leverage.

What October 15, 2025 actually changed

The largest driver is a rule change, and it is specific to Massachusetts.

On October 15, 2025, 760 CMR 74.00 took effect, a regulation issued by the Executive Office of Housing and Livable Communities under the Affordable Homes Act, Chapter 150 of the Acts of 2024. A seller or their agent may no longer condition acceptance of an offer on the buyer agreeing to waive, limit or restrict a home inspection. They also may not accept an offer when they know, directly or indirectly, that the buyer intends to waive one. A mandatory disclosure form goes to the buyer, and violations can reach the licensing board and Chapter 93A.

It covers one-to-four unit residential property, condominiums and co-op shares. It exempts auctions, foreclosures and deeds in lieu, family and court-ordered transfers, estate and trust sales, certain new construction carrying a one-year warranty, and any contract signed before the effective date. A buyer can still choose to waive voluntarily after signing the disclosure. What a seller cannot do is ask for it, reward it, or take the offer knowing it is coming.

Housing Secretary Ed Augustus framed it as leveling the field so buyers get “a clear picture of needed repairs or safety issues that could arise.” John Gallagher of the New England chapter of the American Society of Home Inspectors put it more bluntly: “No one wants mandates. But people should have a right to due diligence.” Not everyone agrees. Anthony Lamacchia has argued publicly that the rule stops agents from conveying a real advantage their buyer is offering. That is a fair objection and worth knowing about.

Here is the part that connects to the cancellation number. Waived inspections were routine across Jamaica Plain, Roslindale and South Boston in 2021 and 2022. A waived inspection is a contract with no exit ramp. Those deals did not fail at a low rate because the houses were sound. They failed at a low rate because the buyer had no mechanism to fail. Restore the contingency to a meaningful slice of deals and the measured fall-through rate rises, even if not one additional house has a single new defect in it.

The regulation did not put problems into Greater Boston’s housing. It put doors into Greater Boston’s contracts.

What an inspector actually finds here

Which brings me to the second driver, and to the reason I think this lands harder in our market than it would in Charlotte. Our housing stock is old, and it is old in two different ways that fail two different inspections.

I pulled every closed sale recorded in MLS PIN across Suffolk, Middlesex, Norfolk and Essex counties in July 2026, 4,041 transactions. Of those, 35.6 percent were built before 1940 and 64.9 percent before 1978. Nearly one in five, 18.6 percent, still heats with oil. Average total market time was 34 days.

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Narrow it to two-to-four family property and it gets stark. Of the 299 multi-families that closed in the region that month, 91.3 percent predate 1940. Every single multi-family that closed in Somerville was pre-1940, average year built 1901. Same in Everett, average 1903. Same in Cambridge, average 1892. Boston came in at 93.1 percent across 58 sales, average 1910. These are the triple-deckers, and they are functionally a century old.

What surprised me was how the two risks separate geographically. They run almost inversely.

Somerville is 77.2 percent pre-1940 and almost entirely off oil. Stoneham is the mirror image, only 26.9 percent pre-1940 but 44.4 percent on oil heat, the highest share I found. Framingham runs 11.7 percent pre-1940 against 28.3 percent oil. There is no town in this market where an inspection is a formality. There are only towns where you should know in advance which of the two reports to brace for.

Why these findings end deals instead of just repricing them

An inspection finding kills a deal when the number is larger than the buyer’s remaining cash and nobody has a plan already in hand. Both of our regional risks clear that bar easily.

Knob and tube is an insurance problem before it is an electrical problem. Carriers routinely decline to write a new policy on a home with active knob and tube, or require removal before closing or within about 30 days after. A buyer who cannot bind coverage cannot close, and the fallback through the Massachusetts Property Insurance Underwriting Association tends to run 30 to 60 percent above a standard policy. That is a monthly payment change discovered in week two of a contract.

Buried oil tanks are worse because the range is so wide.

Read that last line again, because it is the actual mechanism. A tank closure takes four to six weeks. A Massachusetts inspection contingency typically runs seven to ten days. The buyer is being asked to decide about a problem whose resolution takes six times longer than the window they have to decide in. That is why they ask for a credit. That is why, when the credit is refused, they walk.

Pre-1978 stock carries its own compliance obligations under the state lead law, which is a third category of expense that arrives on the same timeline.

The third driver, and the one nobody can fix

Financing nerves are real and they are not a Boston phenomenon. Redfin’s own agents describe it plainly. “Sometimes buyers get cold feet before the inspection,” said Juan Castro, a Redfin agent in Orlando. “They revisit the numbers with their lender, get anxious about the payment.”

At current rates and current Greater Boston prices, the gap between what a buyer qualifies for and what a buyer is comfortable paying has gotten thin. When that buyer re-runs the numbers in week two and the payment has moved because rates drifted or the tax line came in higher than the listing sheet suggested, a $9,000 inspection item stops being a negotiation and starts being an exit. The inspection is the reason on the form. It is rarely the whole reason.

Buyers: what to do in week one

None of this is bad luck. It is a schedule problem, and the schedule is short.

One more thing, and it matters more than it sounds. Nobody can ask you to waive the inspection anymore, and nobody can quietly prefer the offer that does. If an agent hints otherwise, that is not a market norm, it is a regulatory violation. Our full walkthrough for buyers in Greater Boston covers how we sequence this on a live deal.

Sellers: the older your building, the earlier you move

If you own a triple-decker in Dorchester or a 1901 two-family in Somerville, understand your statistical position. Ninety-one percent of the multi-families that traded in this region in July were built before 1940. A buyer’s inspector is going to find something. The only variable you control is whether you find it first.

1. Get a pre-listing inspection, or at minimum, quotes. You do not have to fix anything. You have to be able to answer. A seller who responds to a knob and tube finding with a written electrician’s quote for $14,000 is negotiating. A seller who responds with silence for four days is watching a buyer talk themselves out of the house.
2. If you have or ever had oil, sweep for the tank now. Clean closure documentation before listing costs a few thousand dollars and removes the single widest cost range on this page from your negotiation.
3. Do not try to engineer around the inspection. Conditioning acceptance on a waiver is prohibited, and so is accepting an offer you know is built on one. The exposure runs to your license and to Chapter 93A.
4. Price the known defect in, or hold the quote. Both work. What does not work is pricing as though the roof is fine and then acting surprised.
5. Answer inside 24 hours. Most Greater Boston deals I have watched die in the last year died of delay, not of the finding itself.

If you are weighing a sale on an older building and want a realistic read on where it prices with and without the repair, start with a valuation on your property or look through our seller resources.

What I am actually telling clients

Go back to that Somerville basement. The version of that morning that closes and the version that collapses look identical up to the moment the flashlight goes up. What separates them is entirely upstream. In the version that closes, the seller already has an electrician’s quote in a folder because someone talked him into a pre-listing inspection, the buyer is underwritten rather than pre-approved, and the two sides settle on a credit inside a few days. Same wire, same house, same century-old problem. Everyone had simply thought about it first.

Boston is not cracking. A 10.9 percent cancellation rate in a market where buyers still narrowly outnumber sellers, in a country where sellers outnumber buyers by half, is a market absorbing a rule change and an affordability squeeze at the same time. The rule change is a good one. It gave buyers back a protection that competitive pressure had stripped out of a huge share of offers, and the cost of that protection is that some deals now end in week two instead of ending in a lawsuit in year two.

The 10.9 percent is not random. It is concentrated in deals where the buyer was pre-approved instead of underwritten, where the inspection got booked on day nine, and where the seller of a 1905 building had never once had a contractor look at it. Fix those three things and you are not in that number.

If you are under agreement right now and something in the report has you rethinking it, reach out. Most of what looks like a dead deal in week two is a sequencing problem with a price on it.

Sources

• Redfin, “With Buyers Firmly in the Driver’s Seat, Home-Purchase Cancellations Hit Highest Level in Nearly 3 Years,” August 2026
• Banker & Tradesman, “Uptick Reported in Boston Home Sales Falling Through”
• Redfin, “The Number of U.S. Homebuyers Just Dropped to a Record Low,” July 2026 buyers vs. sellers report
• Inman, “Sellers Now Outnumber Buyers By 51 Percent, Nearing December’s Record”
• Commonwealth of Massachusetts, 760 CMR 74.00, Residential Home Inspection Waivers
• Massachusetts Mandatory Residential Home Inspection Disclosure form, EOHLC
• Massachusetts Real Estate Law Blog, “Massachusetts Bans Home Inspection Waivers…Well, Sort Of”
• Freeman Mathis & Gary, “New Massachusetts home inspection law: What real estate professionals need to know”
• Banker & Tradesman, “Mass. Homebuyers Are Gaining Power. Inspection Law Could Boost It”
• National Association of Realtors, “Buyer, Seller Agreements to Waive Inspections Catch the Attention of State Governments”
• Tank Removers, “Oil Tank Removal Cost Massachusetts (2026)”
• CommTank, “Massachusetts Residential Oil Tank Removal: A Homeowner’s Guide”
• MKC Associates, “Knob and Tube Wiring: What Boston Homeowners Need to Know”
• HomeLight, “Pre-Approval vs. Pre-Qualified vs. Underwritten Pre-Approval”
• MLS PIN closed-sale records, Suffolk, Middlesex, Norfolk and Essex counties, July 1 to July 31, 2026 (n = 4,041). Author’s analysis.

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