Indy's "under contract" home sales keep falling through
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Putting your house under contract doesn't carry the same sense of inevitability that it used to.
Driving the news: About 18% of Indianapolis-area pending home sales fell through in September, as mortgage rates kept inching up, according to Redfin data.
Why it matters: It's another sign of how steep mortgage rates are squashing sales activity.
Flashback: Back in the before times of January 2017, fewer than 12% of pending home sales fell through in Central Indiana.
Context: 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.
- Such buyers either walk away — or underwriters pull approval.
Between the lines: Buyers are just more jittery now, even as mortgage rates back away from 8% highs.
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."
The bottom line: This is partly why home sales are on track for their slowest year since the housing crisis.