Canceled home-sales contracts hit their highest rate in almost a year as skittish homebuyers blanche at mortgage rates that are the highest they’ve been in more than 20 years, according to a new Redfin report. 

In August, 60,000 or 15.7% of sales contracts were canceled, an increase from last year’s 14.3% and the highest percentage of canceled contracts since October 2022, when mortgage rates first exceeded 7%. 

Last month’s average 30-year fixed mortgage rate was 7.07%, but it did rise to 7.23% at one point during the month, its highest since 2001. Those rising rates are having a big impact on monthly payments for potential homebuyers and deterring potential sellers. 

In August, the median U.S. home sale price rose 3% from 2022, the largest increase since last October and down just 0.2% from July. 

With higher mortgage rates and inventory impacted by potential buyers holding off on selling, prices and competition are high. 

“Home prices will likely remain elevated for the foreseeable future,” said Chen Zhao, Redfin economics research lead. “The Federal Reserve still has more work to do in its battle against inflation, which means mortgage rates are unlikely to come down anytime soon. As long as rates remain high, homeowners will be reluctant to sell. And that lack of homes for sale will keep prices high because it means buyers are duking it out for a limited supply of houses.”

August listings rose just 0.8% from July and fell 14.4% from 2022.

“New listings have likely bottomed out,” Zhao said. “Most of the homeowners who feel handcuffed by high rates have already made the decision not to sell. That means many of today’s sellers are putting their homes on the market because they have to, in some cases due to divorce, family emergencies or return-to-office policies.”