Mortgages with rates above 6% now outnumber sub-3% loans

"Mortgage rates above 6% now represent a larger share of outstanding loans than the ultra-low rates that defined the pandemic-era housing boom, Danielle Hale, Realtor.com's chief economist, said in a statement. This crossover reflects a gradual resetting as some households trade in low-rate mortgages for higher-rate loans or enter the market for the first time, even as rate lock-in continues to limit the pace of inventory recovery."

"About half (51.5%) of outstanding mortgages include rates of 4% or less, while more than two-thirds (69%) have rates of 5% or less. This is a likely factor keeping homeowners from becoming sellers, as the typical property owner would see an increase of almost $1,000 in their monthly mortgage payment if they sold and bought a median-priced home today while trading in their low-rate loan, according to the report."

Mortgage rates above 6% have grown to a larger share of outstanding loans, signaling a gradual market reset as some households trade low-rate mortgages for higher-rate loans or enter the market. A large share of homeowners still hold very low rates: 51.5% at 4% or less and 69% at 5% or less, which discourages listings by creating steep monthly payment increases for those who would trade into current rates. The share of loans above 6% rose more than four percentage points from Q3 2024 to Q3 2025, and life events continue to drive moves. A $200 billion purchase of mortgage-backed securities by Fannie Mae and Freddie Mac triggered a rapid rate decline and briefly pushed 30-year fixed pricing below 6%, spurring lender expectations of refinance activity.

Read at www.housingwire.com