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.
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.
More Nashville stories
No stories could be found
Get a free daily digest of the most important news in your backyard with Axios Nashville.