Cancellation of home purchases is accelerating in the US.

According to national real estate broker Redfin, residential real estate transactions are being canceled at the highest rate in nearly a year due to high mortgage interest rates that are shocking home buyers.

Nationwide, nearly 60,000 home purchase contracts were canceled in August, accounting for 15.7% of the total for the month. That's up from 14.3% a year earlier and is the highest percentage since October 2022, when mortgage interest rates topped 7% for the first time in two decades.

The average interest rate on a 30-year fixed mortgage was 7.07% in August. At one point last month, it reached 7.23%, the highest rate since 2001, significantly increasing a homebuyer's monthly payment for a home compared to a year ago.

To get extra maintenance, repair and closing costs when seeing their high interest rates on paper, many are choosing to reject the deal, even if it means losing their mortgage money. Many sellers are also willing to let buyers walk away because they don't want to back out under repair requests.

Home prices rose the most in nearly a year. The median U.S. home sale price in August rose 3% from a year ago to $420,846, the highest annual gain since October 2022.

Activity in the housing market is slowing because of rising mortgage interest rates, but prices remain high because buyers who are active in the market are competing for the limited number of homes available.

"Home prices are likely to remain elevated for the foreseeable future," said Chen Zhao, an economics researcher at Redfin. "The Federal Reserve still has to continue to fight inflation, which means mortgage rates are unlikely to fall anytime soon. As long as rates remain high, property owners won't be in a rush to sell. And the lack of homes on the market will keep prices high as buyers vie for the limited supply of homes."