Home Purchases Are Falling Through at the Fastest Rate in Nearly a Year

Redfin reported on Friday (9-15-23) that residential real estate deals are falling through at their highest rate in almost a year as high mortgage rates and limited inventory are giving would-be homebuyers sticker shock, cold feet, and a reason to pause.

According to Redfin data, nearly 60,000 home-purchase agreements were cancelled alone in the month of August—equivalent to 15.7% of homes that went under contract during that month. That is up 14.3% from a year earlier and marks the highest percentage since October 2022, when mortgage rates surpassed 7% for the first time in 20-years.

Adding additional background and her analysis, Redfin Economics Research Lead Chen Zhao said:

“Home prices will likely remain elevated for the foreseeable future. The Federal Reserve still has more work to do in its battle against inflation, which means mortgage rates are unlikely to come down anytime soon. As long as rates remain high, homeowners will be reluctant to sell. And that lack of homes for sale will keep prices high because it means buyers are duking it out for a limited supply of houses.