From CNBC:
A surprising share of homeowners have high mortgage rates. Here’s the breakdown
The share of U.S. homeowners with high rates on their mortgages has jumped sharply in just the last few years.
That’s having a marked impact on the refinance market and a somewhat more muted impact on home sales. Rates have been front and center in the debate over how to improve home affordability — and for good reason.
In 2022, after mortgage interest rates hit more than a dozen record lows, sparking a refinance bonanza, barely 10% of homeowners had 30-year fixed mortgages with rates above 5%. Just four years later, that share has jumped to over 30%, according to ICE Mortgage Technology. About 20% of borrowers have mortgages with a rate over 6%.
Home sales have been less than robust over the last few years, with the National Association of Realtors reporting a historically low 4.06 million sales last year, basically unchanged from 2024. This, after hitting a 15-year high of 6.12 million home sales in 2022.
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Applications to refinance a home loan are now about 120% higher than they were one year ago, according to the Mortgage Bankers Association.
As for home sales, the last four years were characterized by the so-called rate “lock-in” effect, meaning potential sellers didn’t want to give up their historically low rates. They therefore put off moves that they might otherwise have wanted to make.
Entering 2025, there were roughly 39 million homeowners with an interest rate below 5% and roughly 12 million with an interest rate below 3%, according to Walden.
“If you look at how those borrowers behaved last year, only about 6% of those folks gave up those low rates, either through a refinance to pull equity out of their home or through the sale of their home. Close to 95% of homeowners held on to those rates tight,” he said.
