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IPFS News Link • Central Banks/Banking

More homebuyers back out of deals as mortgage rates hit 23-year high

• by Gabriella Cruz-Martin

Roughly 53,000 US home purchase agreements fell through in September, according to Redfin, equal to 16.3% of homes that went under contract that month. That's the highest percentage of canceled contracts since October 2022 when mortgage rates surpassed 7% for the first time in two decades. The share is also up from 15.2% a month earlier and 15.8% a year earlier.

Pandemic boomtowns where home prices skyrocketed due to the influx of remote workers were hit the hardest with buyers with cold feet, Redfin noted, with some areas in Florida seeing contract cancellation rates over 20%.

The reaction from buyers comes as mortgage rates remained at 23-year highs between August and September, convincing rate-sensitive folks to call it quits on their home purchase plans. Even more cancellations may be on the horizon, as rates hover near 8%.