High interest rates push homebuyers to back out of deals

Share on email About 16% of pending home sales fell through in September as mortgage rates climbed to new highs, according to new data from Redfin.Typically, homebuyers sign sales agreements with a contingency that lets them back out of the deal if, say, there's an issue with an inspection or something's off in the appraisal.

But deals can also fall apart because surging mortgage rates suddenly mean the buyer can no longer afford the house — perhaps because they didn't lock in a rate when they went into contract, or their rate lock expired.now. Meanwhile, home sellers, locked into low mortgage rates, are less likely to make concessions to nervous buyers, said Daryl Fairweather, Redfin's chief economist. They're not "super-motivated.

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