Golden Handcuffs Loosen as Mortgages Above 6 Percent Exceed Share Below 3 Percent

‘This crossover reflects a gradual resetting’ in the U.S. real estate market, says Danielle Hale, chief economist at Realtor.com.

A 'For Sale' sign is displayed near a home in Austin, Texas. Brandon Bell/Getty Images

New Realtor.com data show that more U.S. homeowners now hold 6 percent mortgages than sub-3 percent loans for the first time since 2020.

During the third quarter of 2025, 21.2 percent of outstanding mortgages carried interest rates of at least 6 percent, compared with 20 percent that remained below 3 percent.

“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,” Danielle Hale, chief economist at Realtor.com, said in a Jan. 14 news release.

Still, ultra-low mortgage rates account for a large share of today’s U.S. housing market. Almost 52 percent of outstanding mortgages maintain rates at or below 4 percent, and 69 percent carry rates of 5 percent or lower.

At the onset of the pandemic, interest rates were historically low, with the 30-year fixed-rate mortgage touching just 2.65 percent in January 2021. It was not until September 2022 that mortgage rates climbed above 6 percent.

For the week ended Jan. 9, the 30-year mortgage rate was 6.18 percent, according to the Mortgage Bankers Association.

Crisis-era rates produced golden handcuffs for millions of homebuyers, or homeowners who refinanced at lower rates. As a result, the lock-in effect constrained supply, with many homeowners reluctant to list their properties for sale and move elsewhere at higher rates or prices.

However, now that mortgage rates have eased from the 7 percent level observed a year ago, housing supply is improving, though inventories remain tight, Hale notes.

“Even with rates still elevated, modest mortgage rate decreases into the low-6% range could encourage additional homebuying activity,” she said.

“Further easing in inflation and mortgage rates would be key to unlocking more seller participation, helping to relieve price pressure and competition in an under-supplied market.”

Today, about 40 percent of homes in the United States do not have a mortgage, up from 33 percent in 2010, according to Census Bureau data compiled by Apollo chief economist Torsten Slok.

Grappling with Housing Affordability

The current administration has proposed various measures to lower costs for homebuyers.

Last year, the White House proposed portable mortgages, which would allow homeowners to transfer their mortgage rates, amortization, and terms to a new property. Officials also floated the idea of 50-year mortgages, a move that would possibly lower the barrier to entry for young families.

This month, President Donald Trump suggested banning large institutional investors from purchasing single-family homes to prevent tighter housing stocks (although such investors own only 3 percent of the homes).

He also said on Truth Social that he would direct government-sponsored mortgage enterprises Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities. The announcement brought the 30-year rate below 6 percent on Jan. 9—the first time since August 2022—before returning above that threshold days later.

All of these efforts are aimed at addressing housing affordability—a top issue for Generation Z and millennial homebuyers.

Housing is a top financial concern for many U.S. families, especially the younger generation.

A Jan. 14 report by the America First Policy Institute found that 74 percent of young adults—ages 18–34—say housing costs have delayed a major life decision, whether moving for a better job or having a child.

In a sign that homebuying is a deferred dream for many young people, the average age of first-time homebuyers is 38, according to the National Association of Realtors.

“The U.S. housing market is split into two groups: first-time buyers struggling to enter the market and current homeowners buying with cash,” said Jessica Lautz, the group’s deputy chief economist and vice president of research.

“First-time buyers face high home prices, high mortgage interest rates, and limited inventory, making them a decade older with significantly higher incomes than previous generations of buyers.

Costs have stabilized in the past year, but the cumulative effect—as well as student loan debt and 22 percent inflation—has been a barrier to entry for many younger buyers.

In December, according to Redfin, the median sale price was about $429,000, a 29 percent increase from five years ago.

Rob Sabo contributed to this story.