Homebuyers are walking away from their contracts at near-record rates, a potential sign of how higher mortgage rates are causing buyers to rethink their plans.
Nationally, 14.5% of homes went without a contract in September, according to Redfin data, the highest proportion ever recorded outside of the early months of the COVID-19 pandemic.
Learn more: Why the real estate market will experience “a few difficult months”
Homes can go out of contract for a number of reasons, such as inspection results or financing issues, or when a buyer simply changes their mind. But pending sales tend to fail at higher rates when buyers have more options and more negotiating power, as is currently the case in much of the country.
Indeed, metropolitan areas that are particularly buyer’s markets, such as Jacksonville, Tampa, Fla., and Las Vegas, have all seen contract cancellation rates approaching 20%, higher than anywhere else in the country. But they are relatively rare in heavily seller markets like San Francisco, where only 2.8% of deals failed.
Claire Boston is a senior reporter for Yahoo Finance, covering housing, mortgages and homeowners insurance.
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