Monday Market Update: A Notable Mortgage Milestone

While winter is here and a chill has been in the air, this is the time of year when buyers and sellers prepare for the spring real estate market. Just two days ago, The Washington Post revealed a statistic that could be a gamechanger: “There are now more Americans with mortgage rates higher than 6 percent than below 3 percent.”

You may recall that during the pandemic years, mortgage rates hit historic lows and many homeowners refinanced to secure those low interest loans. In 2021, it is reported that a mortgage loan (30-year fixed) could be had for less than 3%. Yet for the last 3 years, rates have remained double at 6% and above.  Those who had secured 3% rates were not moving, contributing to the inventory issues and increasing prices, known as a ‘lock-in effect.’

First signs of the lock-in effect easing are here, as more Americans now have rates above 6% than those with rates below 3%. Yet half of Americans still have a rate under 4%, so while the lock-in effect is lessening, it’s still playing a role in the market. Redfin Chief Economist Daryl Fairweather encourages consumers to see crossover of Americans with higher rates as a ‘slow unwinding.’ Fairweather predicts that “It’s probably going to be another four, five years of [previously favorable rates] being a major factor in the housing market.”

Regardless of rate, there are circumstances that push a homeowner to sell, such as marriage, divorce, children or new jobs. A Bankrate survey from summer 2025 revealed that 32% of US adults would need a mortgage rate lower than 6% to sell their home, while 23% prefer rates below 5% before moving. 

Last but not least, note that real estate experts at the Columbia Business School have shared that 40% of homes don’t have a mortgage at all; thus the ‘lock-in effect’ is not the sole reason for a lack of home turnover. 

Stay tuned to our Monday Market updates as we follow more factors related to what the spring buying and selling season could bring!

Resource Used:  A powerful force has been holding back the housing market. It’s finally easing. (The Washington Post) 

Have a great week!

Bobbi

Bobbi Decker
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Broker Associate, Bobbi Decker & Associates
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