The share of homeowners with 6 percent or more mortgage rates is at its highest level in nearly a decade, according to real estate brokerage Redfin, which added that the “lock-in effect” in the housing market has started to ease.
The company said 17.2 percent of homeowners have a 6 percent or higher rate, which is the largest proportion since 2016.
“That’s up nearly five percentage points from 12.3 percent in the third quarter of 2023,”the company said in a Feb. 6 statement. “If this growth rate were to continue, which is feasible, the share of homeowners with a rate of at least 6 percent would nearly double in the next three years.”
Meanwhile, the share of homeowners with an interest rate less than 6 percent stands at 82.8 percent. As such, an even higher share of owners have a rate below the Jan. 30 weekly average rate of 6.95 percent, said the report.
This is “prompting many to stay put instead of selling and buying another home at a higher rate.” The phenomenon, called the “lock-in effect,” dries up housing supply, thus supporting price growth and contributing to the affordability crisis
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