High mortgage rates forcing Americans to cancel home deals

Rising mortgage rates are forcing a growing number of Americans to back out of home-purchase deals, according to the latest available data.

Some 63,000 home-buying deals were canceled in July—that’s about 16% of properties that went into contract, per Redfin Corp. About 15% of home deals fell apart in June. The same time last year, when the housing market was red hot, the figure stood at 12.5%.

The Federal Reserve’s attempt to cool inflation by hiking interest rates has increased borrowing costs, sidelining many potential home buyers.

Hot zip codes
With high mortgage rates beginning to cool housing boomtowns, some new zip codes in the New England region are heating up, experts said.

Small towns like Windham, Maine and North Attleboro, besides Massachusetts and New Hampshire are seeing a lot of home-buying action, according to Realtor.com. 

WFH culture
With remote working on the rise, New Hampshire’s Hookset, located just about 60 miles north of Boston, is a practical choice for people who have been spared the daily commute to the office.

“People are buying homes in these areas that are bigger and more affordable than what you would find in a downtown area,” said Danielle Hale of Realtor.com. “Possibly it’s because they have more flexibility than they had pre-pandemic.”