The lock-in effect is real. And it’s strong. According to Redfin, 88.5 percent of U.S. homeowners with mortgages have an interest rate below 6 percent, down from a record high of 92.8 percent in 2022.
A big reason for the drop is, of course, the fact that everyone who purchased a home in the last year was entering the market at a time when the average mortgage rate was above 6 percent. But it also speaks to the inventory shortage, as many would-be sellers wait out the market for interest to further fall.
Here’s the full breakdown of where today’s homeowners fall on the mortgage-rate spectrum:
- Below 6 percent: 88.5 percent of mortgaged U.S. homeowners have a rate below 6 percent, down from a record 92.8 percent in the second quarter of 2022.
- Below 5 percent: 78.7 percent have a rate below 5 percent, down from a record 85.6 percent in the first quarter of 2022.
- Below 4 percent: 59.4 percent have a rate below 4 percent, down from a record 65.3 percent in the first quarter of 2022.
- Below 3 percent: 22.6 percent have a rate below 3 percent, down from a record 24.6 percent in the first quarter of 2022.