The tea leaves are lining up in favor of homebuyers who can afford today's higher mortgage rates.

Multiple sources indicate that more and more people are canceling their home purchases because rates have moved beyond their reach -- a situation that puts "sold" houses back on the market in droves. And the phenomenon is happening in both new construction and resale.

"A lot more new-home buyers (are) canceling," reports Rick Palacios Jr., research director at John Burns Real Estate Consulting. And a source at the Redfin brokerage says sales of existing homes "are falling through at (the) fastest clip since 2020," bringing the housing market to its knees, if only temporarily.

Consequently, if you lost out on a house in a bidding war, check back with the seller. It may be available again -- possibly at a lower price.

A house is never really sold until the deal is closed and all the papers are signed. Any time before closing, buyers can walk, though they may have to pay a penalty. And if they back out, the place has to be put back on the market.

In the resale sector, some buyers are simply walking away. But others are backing out in hopes of obtaining a better deal on the same property. "The slowdown in housing-market competition is giving homebuyers room to negotiate," says Redfin's Deputy Chief Economist Taylor Marr.

In the case of a new home under construction, builders are likely to hold the line on the asking price because they've already absorbed the building costs. Any discount is likely to be minimal, possibly in the form of incentives or upgrades.

There are no such restrictions if it's a resale. Obviously, sellers can maintain their asking price if they choose. But with housing inventory creeping upward, the more likely scenario is for sellers who lose a sale to relist their places for somewhat less than before.

Take Sarasota County, Florida. According to data from the local multiple listing service, in mid-July, the median list price of contracts canceled during the previous seven-day period was $307,350. But when those houses were put back on the market, the median list price had dropped to $273,670.

According to Altos Research, housing prices have likely peaked for the year. Meanwhile, the number of houses on the market is 31% higher than this time last year, and they're taking longer to sell.

"The market is changing rapidly," says Altos founder Mike Simonsen. "When demand cools, homes get fewer offers -- or no offers -- and contracts start to fall through."

Relists, Simonsen points out, "are now at their highest level (in) recent years, and they're ticking up every week."

Other market forces are at work when a contract is scuttled on a new house for which construction hasn't started. Here, the builder can do just about anything they want: Raise the price, keep it the same or lower it. But with traffic down and few new buyers in sight, builders are most likely to go lower, especially since construction costs are falling.

Builders always experience cancellations: People's circumstances change, or perhaps they are unable to secure financing. But now walkaways are "extremely high," a Phoenix builder told the Burns consulting firm in its latest survey.

Most builders don't reveal their cancellation rates, but publicly owned companies do in their quarterly reports to stockholders. At this writing, only a few reports have been filed, but they point to better deals ahead.

The cancellation rate at KB Home was 17% at the end of May, compared to 10% for all of 2021, according to housing blogger Bill McBride. At the end of April, Hovnanian's rate was also 17% (compared to 15% a year ago), and Lennar's was at 11.8%.

At the same time, construction and labor costs are falling, which means builders can lower their prices and still maintain their margins. And they are. Here's what some builders told the Burns firm in its most recent survey:

"Trades are more willing to negotiate pricing since (the) market has adjusted significantly (in the) past 60 days," said an Austin, Texas, builder. A colleague from once red-hot Boise agreed: "Sales have slowed tremendously. Builders are dropping prices and halting new starts. ... (We're) expecting 15% to 20% reduction in most costs."

It's a similar story in Houston, where one builder reported that building product costs are down in almost every category, enabling him to use the savings for "buying down mortgage rates to get buyers qualified." And a builder in Kennewick, Washington, confided that sales have been so slow of late that his company is "repricing our houses to try and find the new market."

If builders haven't started reacting to the rising number of dropouts -- as well as the general falloff in sales -- they almost certainly will soon.

"We've reached the top in pricing," a Southern California builder told Burns. And a counterpart in St. Louis expects to see "lower costs coming in the near future, as demand cools and manufacturers and trades see backlogs shrinking."

Experts say that a 2008-style housing crash is unlikely to happen now, if only because lending standards are much tighter than they were prior to the Great Recession. Still, foreclosures are starting to tick upward.

ATTOM, a property data firm, says that in May, there were fewer than 31,000 houses nationwide with foreclosure filings -- that is, houses with default notices, houses scheduled for the auction block or ones already repossessed by lenders. That's up a scant 1% from April -- but it's 185% more than in May last year.

And while the share of borrowers at any stage of delinquency was at an all-time low in the first quarter, CoreLogic reports that more than a third of delinquent mortgages are six or more months past due.

Fortunately, if you are among those borrowers who cannot make their payments, there are plenty of options available: from obtaining permission from your lender to miss a few payments until you get back on your feet to selling your place before the gavel slams down.

But you have to move quickly. Waiting too long could cost you, especially since housing values may soon start to recede in some spots. Even if you think your financial problem will only last a few months, don't hesitate.

Your first step is to call the loan servicer: the company that collects your payments, pays your taxes and insurance, and otherwise administers your mortgage. Depending on your situation, the servicer can offer you several choices. Each case is different, but usually you'll be given one of four options:

-- Temporarily suspend or reduce your monthly mortgage payments for a specified period of time until you believe you'll be able to start paying again.

-- Pay any past-due amount by adding a percentage of it to your regular payment over a specified period until your mortgage becomes current.

-- Defer past-due amounts to the end of your loan term and keep your monthly principal and interest payment the same.

-- Change your original loan terms, perhaps the payment amount, the loan term or even the interest rates.

Each of these alternatives has its benefits, but all allow you to remain in your home and avoid foreclosure. However, you still have to qualify. If the servicer determines there's just no way you can dig out, no help will be forthcoming.

Another choice would be to refinance. But with loan rates blasting through the 6% level recently, that alternative is basically off the table. According to data firm Black Knight, refinancing currently makes sense for fewer than 500,000 homeowners nationwide -- the lowest number in more than two decades.

All is not lost, though, because at this point, you can still sell your house -- perhaps even at a profit, depending on when you bought the place. Two key points here:

-- House prices aren't falling yet, but they also aren't increasing at the breakneck speed of the recent past. Some anxious sellers are cutting their asking prices, but for the most part, they're eating into their appreciation -- not dropping below what they originally paid for their places.

Of course, if you just recently bought your house, there probably hasn't been a lot of appreciation, and you have less paper profit to dig into. Which takes us to the next point:

-- Foreclosure is not an event; it's a process. Depending on where you live, it could take a few months for the sheriff to knock on your door -- or even years. That alone gives you a little more breathing room.

You can sell during the foreclosure process, right up to the point when the judge's gavel slams down, but it's far better to do so before the process starts. Whatever you do, don't leak the fact that you are having trouble making your payments. Be honest with your agent, to be sure, but otherwise, keep the situation under your hat. If a would-be buyer gets wind, they're likely to assume you're desperate and lowball their offer.

If you manage to sell at a profit, you simply pay your lender what you owe, pocket the rest and move on. But if you sell at a loss and cannot pay your lender in full with the proceeds, you'll have to persuade the lender to approve what's known officially as a pre-foreclosure sale.

Gaining the servicer's blessing for a short sale can sometimes take weeks, if not months. You have to prove you have a long-term hardship; that you have been unable to sell at a price that would cover what you owe; that you are in, or about to go into, foreclosure; and that you can no longer afford to live there. You also will have to fill out what may seem like mountains of paperwork.

If your lender agrees to your short sale, you land a buyer and the sale closes, the proceeds will go to the servicer and you will be issued a deficiency waiver that relieves you of your responsibility for any remaining balance.

Your credit score will suffer. But otherwise, you will be free to move on.

Calculating people are always looking for ways to separate the rest of us from our money. Such, it appears, is the case with Home Title Lock, an outfit that promises to "protect" you from home title theft.

Home title theft is when a criminal gains the title to your home and either sells it or takes out a mortgage on it. The bad guys do this by simply forging your name on a deed and recording it with county officials. The county recorder is obligated to place the title in the records, but not to verify its legality. Unless the deed is obviously fake, it is recorded as a matter of course.

To "protect" homeowners from this scam, Home Title Lock says it will monitor a subscriber's title, 24-7, and notify them right away if anyone tampers with it. The cost: $19.95 a month.

There's no telling how often home title theft occurs. But the company, whose spokesmen include defrocked attorney Rudy Giuliani and former Speaker of the House Newt Gingrich, maintains it happens with regularity. Indeed, the company claims that the FBI classifies home title theft as "one of the fastest growing" crimes in America.

ABC News has thoroughly trashed that claim, along with the unsubstantiated claims of two supposed victims of the crime. In a major story published in mid-June, the network said the FBI has no evidence of ever making such an assertion. Another Title Lock spokesman, former FBI agent Art Pfizenmayer, provided a document to ABC to try to justify the claim. But the document he provided was nearly two decades old and "wasn't about home title theft at all," but rather mortgage fraud, ABC found.

As the network points out, the two are entirely different: "Mortgage fraud involves lying to lenders to obtain loans, while title theft involves filing fraudulent documents with county authorities to claim ownership of a property."

ABC also checked with numerous sources to see just how prevalent title theft really is. While some jurisdictions said it is not common, others said it was epidemic.

But Steve Gottheim, general counsel for the American Land Title Association (ALTA), told ABC that his members are "not seeing (title theft) nationwide."

Others say the same.

"If it comes up once a year, I'd be surprised," Nathan Bossers of Boston National Title told me.

"From what I've been able to find, this is rare," Colleen Taylor of the Old Republic National Title Insurance Co. wrote in a trade magazine in March.

ABC asked Home Title Lock how many cases of title theft it has found, as well as any situations in which the service has helped someone reclaim a stolen title and how much was spent covering a customer's legal fees. No such information was forthcoming, the network says.

And here's the rub: Even if Home Title Lock notices something's amiss with your title, you are pretty much left to deal with it on your own.

It would be "extremely valuable" if a company paid the legal fees necessary to clear the title of a forged document, real estate litigator William Maffucci told Smart Business Philadelphia. "But that's a huge 'if.' I'm not aware of any providers of 'title theft' protection" that do that. If they did, Maffucci said, the service "would almost certainly cost much more."

Diane Tomb, CEO of ALTA, agreed. "Paid monitoring services send alerts to customers when any type of document is filed," she told me. "These companies are not title insurers and typically don't pay to help protect a consumer's property rights."

Instead of subscribing to Title Home Lock or a similar service, savvy owners can check with their recorder's office as often as they like. In some places, you can sign up to receive free notifications if any type of document is filed against your property's address.

Even if a forged deed is filed on your property, Maffucci says, the document conveys nothing because it is not legal.

Agrees Tomb, "A false deed does not actually cause the current owner to lose his property rights."

Nevertheless, title theft can have a "devastating impact" on the homeowner, Maffucci said. Homeowners must hire an attorney and file suit to clear the title, which could be a lengthy, expensive process.

First, though, think back to when you purchased your house. If you needed a mortgage, you almost certainly purchased title insurance to protect your lender against any defects in your home's lineage that could cloud your ownership. You were likely also given the opportunity to purchase a separate title policy that protected you.

Because regular title insurance protects against defects that occurred up to the day you took ownership, it won't help with title fraud. But so-called enhanced policies usually cover post-policy forgeries and other possibilities.

Quotes for enhanced policies range from 10% to 40% more than the premium for a regular title policy. Make sure the policy covers title theft before you sign up.

If you didn't purchase such coverage at closing, you can buy it now, Bossers tells me. If you want to cover the cost of your house when you purchased it, coverage will cost roughly the same as it would have then. If you want to cover the current value, though, you'll pay more.

Meanwhile, regular title insurance will protect a buyer who unknowingly purchases a house from someone who used a fake deed to pretend to be the owner. But buyers also might want to consider enhanced coverage. After all, it you were a victim buying in, you also could be a victim selling out.