{"id":809873,"date":"2025-02-06T08:35:45","date_gmt":"2025-02-06T13:35:45","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/redfin-reports-17-of-homeowners-with-mortgages-have-an-interest-rate-of-at-least-6-the-highest-share-in-nearly-a-decade\/"},"modified":"2025-02-06T08:35:45","modified_gmt":"2025-02-06T13:35:45","slug":"redfin-reports-17-of-homeowners-with-mortgages-have-an-interest-rate-of-at-least-6-the-highest-share-in-nearly-a-decade","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/redfin-reports-17-of-homeowners-with-mortgages-have-an-interest-rate-of-at-least-6-the-highest-share-in-nearly-a-decade\/","title":{"rendered":"Redfin Reports 17% of Homeowners With Mortgages Have an Interest Rate of at Least 6%, the Highest Share in Nearly a Decade"},"content":{"rendered":"

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Redfin Reports 17% of Homeowners With Mortgages Have an Interest Rate of at Least 6%, the Highest Share in Nearly a Decade<\/b><\/p>\n

The lock-in effect is starting to ease because Americans are growing accustomed to elevated rates, and for many, it\u2019s not realistic to stay put forever. That\u2019s boosting listings and easing the housing shortage.<\/i><\/p>\n

SEATTLE–(BUSINESS WIRE<\/a>)–
\n(NASDAQ: RDFN) \u2014 Nationwide, 17.2% of U.S. homeowners with mortgages have an interest rate greater than or equal to 6%, the highest share since 2016, according to a new report<\/a> from Redfin (redfin.com<\/a>), the technology-powered real estate brokerage. That\u2019s up nearly five percentage points from 12.3% in the third quarter of 2023. If this growth rate were to continue, which is feasible, the share of homeowners with a rate of at least 6% would nearly double in the next three years.<\/p>\n

\nMeanwhile, 82.8% of homeowners with mortgages have an interest rate below 6%. That means even more have a rate below the current (Jan. 30) weekly average of 6.95%, prompting many to stay put instead of selling and buying another home at a higher rate\u2014a phenomenon called the \u201clock-in effect.\u201d<\/p>\n

\nBut this lock-in effect has been easing; in the third quarter of 2023, for example, 87.7%<\/i> of mortgaged homeowners had a rate below 6%. And in mid-2022, the share sat at a record 92.7%.<\/p>\n

\nAmerica has been grappling with a severe housing shortage, in part because the lock-in effect has disincentivized people from putting their homes up for sale. Mortgage rates are now more than double the 2.65% record low hit during the pandemic. But for most people, it\u2019s not realistic to stay put forever, which is why the lock-in effect is easing. This is slowly alleviating the housing shortage; new listings and active listings are both higher<\/a> than they were a year ago. Though it\u2019s worth noting that one reason supply is on the rise is that many homes are sitting<\/a> on the market, so stale listings are piling up.<\/p>\n

\nRedfin agents report that many people are moving because a major life event like a job change or divorce has given them no other choice. There are a few other reasons the lock-in effect is easing. One, many Americans are growing accustomed to the idea that rates are unlikely to fall to pandemic lows anytime soon. Two, the pandemic surge in home values means many homeowners have enough equity to justify selling and taking on a higher rate\u2014especially if they\u2019re downsizing or moving somewhere more affordable. And finally, a rising share of Americans are mortgage-free, which means they\u2019re not locked into any rate at all.<\/p>\n

\nEveryone who bought a home in the last two years did so at a time when the average weekly mortgage rate was above 6%, which is why the share of homeowners with rates below 6% has declined.<\/p>\n

\n\u201cThe rate-lock effect is letting up a bit here in Seattle,\u201d said local Redfin Premier<\/a> real estate agent David Palmer<\/a>. \u201cHomeowners hate to give up their 2-3% mortgage rate, but life happens and people have to move.\u201d<\/p>\n

Here\u2019s a breakdown of where today\u2019s homeowners fall on the mortgage-rate spectrum:<\/b><\/p>\n