High mortgage rates made for jittery buyers this fall

Nearly 16% of Nashville-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 muffling sales activity, Axios' Emily Peck reports.

Zoom out: The data shows that the share of local home sales falling through has become increasingly erratic since 2020.

• The percentage of canceled sales pushed toward 20% at the start of the pandemic, but it dropped below 10% during the red-hot local market boom in 2021.
• The number spiked back up above 20% last fall amid mortgage rate hikes.

Flashback: The most recent number is closer to the pre-pandemic times of January 2017, when about 13% of pending home sales fell through in Nashville.

How it works: 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 walk away, or underwriters pull approval.

Between the lines: Buyers are 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," he said.