A large number of homebuyers who signed contracts for new homes in 2021 are facing mortgage-interest rates that are, in some cases, nearly double what they anticipated when they paid their deposits, Realtor.com reports. New-home buyers who signed contracts and paid deposits months before their homes were move-in ready have been forced to raise their budgets to account for rising interest rates, which are driving up monthly mortgage payments by hundreds of dollars.
Most borrowers have opted to absorb added costs to move forward with their home purchases, but some are sacrificing their deposits and walking away from their new homes. As mortgage rates surge beyond 5%, the buyer pool for newly constructed homes is growing smaller.
Most buyers are stretching their budgets rather than giving up on the purchase, unless they are unable to qualify for a mortgage at the current rate, mortgage brokers and real-estate agents say.
Many buyers who agreed to purchase a home months ago are reluctant to back out of the deal and start shopping again. The number of existing homes for sale is near record lows and house prices continue to rise sharply each month.
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