Roughly 53,000 home purchase agreements were canceled in September, equal to 16.3% of homes that went under contract that month, according to new data from Redfin (NASDAQ:RDFN). This represents the highest percentage of cancelations since October 2022, when mortgage rates surpassed 7% for the first time in two decades.
In comparison, 15.2% of home purchase agreements were canceled in August and 15.8% were nixed in September 2022.
Redfin noted that new listings climbed 1.4% month over month in September, the largest increase since February 2022 on a seasonally adjusted basis, and active listings were up 1.9% from August. However, they were also down 8.9% from one year earlier while active listings fell 16.9% year-over-year.
Redfin also reported the median home sale price rose 1.9% year-over-year to $412,081 in September, although it was 2% lower from a month earlier.
“A lot of Americans are sitting on piles of money in their homes, and some are opting to cash out even if it means giving up their low mortgage rate; they’re worried there’s a possibility home prices will fall if rates remain elevated. We expect rates to remain high for the foreseeable future,” said Redfin Chief Economist Daryl Fairweather. “But we also expect prices to stay high into next year. Housing supply is so strained that even a small uptick in listings lures buyers off the sidelines, bolstering sales.”
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