Home-sale cancellations rose 12.4 percent year-over-year in Greater Boston to the highest level seen in any September since 2019, according to Redfin data. iStock illustration

A recent surge in mortgage interest rates and prolonged affordability strains appear to have forced a slight uptick in home purchase contract cancellations in Greater Boston.

But those are not the only forces at work, experts say.

The Boston metro saw a 12.4 percent year-over-year increase in deals falling through in the month of September with 368 homes of all types ending up back on the market according to listings portal and brokerage Redfin.

In total 11.4 percent of all deals fell through last month, the data shows, up 2.3 percent over September 2025. That’s comparable to most months so far this year, and the highest that share has been in any September since 2019.

With the national average 30-year mortgage rate at 7.4 percent according to mortgage-buyer Freddie Mac, affordability struggles are further heightened for prospective homebuyers. The surge in interest rates can drastically impact what they can afford according to Ryan Kirwin, executive vice president of residential lending at Peabody-based TruNorth Bank.

“Some borrowers who may have just qualified with a debt-to-income ratio at the traditional underwriting standard maximum, maybe have been pushed over that maximum,” he said. “Certainly a percentage of customers who were right on the line of qualifying might not now. The second part is just their own perspective on what is in fact affordable. What are they actually comfortable with?”

Big Changes Trigger Buyer Pauses

But the impact of rising interest rates is a more complex issue than first meets the eye.  Buyers are very sensitive to the rate environment even if rate increases aren’t as high as what has seen in prior years, according to Rate President Shant Banosian.

“I’ve noticed throughout my career, homebuyers are very sensitive to interest rates. No matter what they are, when they go up, it always takes a little bit of time for [buyers] to readjust, and then activity starts up again,” he said. “This happens every single time.”

The Federal Reserve’s 2022 campaign of hikes to its short-term interest rate caused buyers to head to the sidelines, said Banosian, who’s been Massachusetts’ most prolific loan originator for many years running, even before taking a senior role at national mortgage company Rate.

The same thing happened after the spring 2023 collapse of Silicon Valley Bank or after international markets panicked after President Donald Trump’s April 2025 “Liberation Day” tariff announcement, he said.

The average interest rate on a 30-year, fixed-rate home loan increased by 77 basis points from the first week of September 2022 to the first week of October 2022, according to Freddie Mac. There was only a 37-basis-point increase over the same time period in 2023 but a 64-basis-point increase in 2026.

Sellers Losing Ground to Buyers

The difference is, now, there are more homes on the market, Banosian said.

The increase in cancelled home-sale contracts also coincides with an uptick in inventory throughout the state. With 9,497 single-family homes on the market in September, there was a 2.9 percent increase in single-family inventory, according to the Massachusetts Association of Realtors.

New listings also saw a considerable jump, with 5,892 new single-family properties added to the market last month, according to MAR. This represented a 7.6 percent increase over September 2025.

There are signs home sellers feel like they’re under pressure: Along with more contracts for sale falling through, Boston-area sellers are making more price cuts and offering more concessions.

There were 2,072 home listings with a price cut in September according to Redfin data. This was a 26.4 percent increase on a year-over-year basis.

Additionally, the share of active listings – Redfin combines single-family and condo listings into a single total – with a price cut was 15.9 percent, a 1.3 percentage-point increase on a year-over-year basis.

And 26.3 percent of Greater Boston listings featured a concession in August according to Redfin, meaning sellers offered something other than a price cut – like a mortgage rate buydown or an offer to pay closing costs – to entice a buyer. This was a 9 percentage-point increase on a year-over-year basis. The company hasn’t yet published data on concessions in September.

Mortgage rate jumps aren’t the only thing forcing Boston-area homebuyers to cancel sales contracts, experts say. It’s also because those buyers have more power. iStock illustration

Opportunity for Buyers

This market has created opportunity for buyers. Expanded inventory translates into reduced competition.

“I’m encouraging all of my buyer clients that, if they were looking, to be looking right now,” said Joselin Malkhasian, a Waltham-based Realtor at Lamacchia Realty. “Now is the optimal time to be a buyer.”

Market conditions have forced sellers to be more willing to negotiate.

“I think that’s why you’re starting to see some deals fall apart because homebuyers all of a sudden realize they can negotiate everything,” Banosian said. “They can negotiate price, they can negotiate credits, they can negotiate inspections along with repairs.”

Along with negotiations on price and money for home repairs, buyers can also look to receive credits to buy down their mortgage rate.

“We’re seeing a lot of sellers giving buyer credits either to buy the rate down [or] to pay their closing costs,” said Malkhasian, who’s also the 2026 president of the Massachusetts Association of Realtors. “We’re seeing a lot of incentives for buyers to buy right now. However, we’re seeing this more heavily on homes that are overpriced [and] on homes that are a little further away from the city.”

Sam Lattof

Lenders Trying to Adapt

High interest rates have put lenders in a difficult spot. With interest rates and affordability reducing buyers’ willingness to transact, lenders are highlighting different products in their inventory, and also providing a more hands-on approach.

One product some lenders are turning to: adjustable-rate mortgages, Banosian and TruNorth’s Kirwin both said. They can help make a home purchase more affordable for a buyer willing to bet on being able to refinance in a few years, but they can also be helpful for a bank trying manage its balance sheet.

“I do think you’re going to see consumer behavior shifting towards long-term ARMs, which works out favorably for banks like us with a balance sheet,” Kirwin said. “We’re not going to keep all the loans that we do, but we’ll certainly keep some. Longer-term ARMs can be an attractive alternative for us for our own balance sheet management.”

The current market heightens the importance of a diverse product set as well as consultation and guidance, according to Banosian.

“When things were easy during COVID and rates were 2 or 3 percent, where you had to step up was your availability and ability to move fast,” Banosian said. “Now, advice and guidance are more important than ever. Really coaching people on seeing the whole deal and how they can make it work for themselves, and how they can utilize the information you’re providing them to have confidence, be prepared and actually get an offer accepted is the key to the whole thing. How you show up for your clients and your partners, now more than ever, matters.”