Rhode Island Homebuyers Face Rising Costs as Cancellations Grow

Rising mortgage rates and elevated home prices are putting pressure on prospective homebuyers in Rhode Island and across the United States, prompting more buyers to abandon purchase agreements as demand weakens. A Redfin housing report released Monday found that 14.5% of home purchase agreements nationwide were canceled in September, compared with 11.4% in the Boston metropolitan area.

The cancellations coincide with a broader slowdown in the housing market. According to Redfin, pending home sales fell about 4% nationwide from August to September, while the number of homes available for sale reached its highest level since the pandemic.

Mortgage rates have climbed to 7.28%, their highest level in three years, according to the report. Although greater housing inventory gives buyers more choices, elevated borrowing costs continue to limit affordability.

Chen Zhao, Redfin's head of economic research, explained how higher financing costs are affecting demand.

“fewer people buy because fewer people can afford them,” said Chen Zhao, Redfin's head of economic research.

In the Boston metropolitan area, pending home sales dropped 10.7% in September compared with the same month a year earlier, according to Redfin. The median home sale price reached $738,305, up 2.5% from September 2025.

Available homes increased 3.1% year over year in the Boston area, while completed home sales rose 1.2%. Nationwide, annual home price growth slowed to 1.3%, and approximately three in five homes sold below their original asking prices, Redfin reported.

Nearly one in five sellers with active listings reduced their asking prices, with price cuts becoming more common in 43 of the 50 largest metropolitan areas.

Zhao said the market's changing conditions could provide opportunities for buyers negotiating with sellers.

“For buyers, less competition means more room to negotiate: on price, on closing costs, on repairs, and sometimes sellers even pay for a mortgage-rate buydown,” she said. “Slow sales also mean prices may flatten or fall in the not-so-distant future.”

With fewer buyers competing for available properties, purchasers may have greater flexibility when negotiating prices, closing expenses and repairs. Redfin's findings also indicate that slower sales could put pressure on home prices in some markets.

Zhao also addressed the challenges facing homeowners who want to sell amid weaker demand. She noted that some buyers have withdrawn from the market, while others still need to relocate and continue purchasing homes.

Her advice to sellers focused on pricing and concessions that could make properties more attractive to financially stretched buyers.

“My best advice for sellers in this environment is to price realistically from the start and lean into any flexibility you can offer; a rate buydown or covering closing costs can go a long way when buyers are stretched thin,” she said.

Jacksonville, Florida, recorded the highest home purchase cancellation rate among the 50 largest metropolitan areas in September, at 19.9%, according to Redfin. Tampa, Florida, followed at 18.8%, while Las Vegas recorded 18.6%, San Antonio, Texas, had 18.5%, and Phoenix reached 18.4%.

San Francisco had the lowest cancellation rate, at 2.8%. Nassau County, New York; San Jose, California; Montgomery County, Pennsylvania; and New York City also recorded cancellation rates below 8%.

Redfin attributed differences between metropolitan areas to local supply and demand conditions. Markets with strong buyer demand and relatively few available listings generally leave purchasers with less flexibility to reconsider or abandon a transaction.