Shift in U.S. Mortgage Market: Rates Above 6% Surpass Those Below 3%
Published: /PRNewswire/ -- The changing landscape of U.S. mortgages was underscored by recent analysis from Realtor.com®, which revealed that the share of homeowners with mortgage rates exceeding 6% has officially surpassed those with ultra-low rates below 3%. This development marks a significant transition in the housing market following a prolonged period of historically low borrowing costs.
Key Findings from the Mortgage Analysis
According to the analysis, as of the third quarter of 2025, 21.2% of outstanding mortgages have interest rates of 6% or higher, compared to 20.0% with rates below 3%. While the mortgage rates have eased somewhat from their peak of 7.04% in January 2025, they have consistently remained above 6% since September 2022, significantly affecting homeowner behavior and market dynamics.
Mortgage Rate Distribution
- Below 3%: 20.0%
- 3% to 4%: 31.5%
- 4% to 5%: 17.1%
- 5% to 6%: 10.2%
- 6% and above: 21.2%
This data, derived from the FHFA National Mortgage Database, reflects a notable shift in mortgage rates that has implications for market mobility and housing supply.
Impact of Low-Rate Mortgages
Despite the increase in mortgages above 6%, a significant portion of homeowners, over 51.5%, still hold mortgages at or below 4%. Nearly 69% of mortgages have rates of 5% or lower. This predominance of low-rate mortgages explains why many homeowners are reluctant to sell; typical transactions would result in an additional monthly mortgage payment increase of nearly $1,000 for those purchasing median-priced homes in the current high-rate environment.
Historical Context of Mortgage Rates
Ultra-low mortgage rates have profoundly influenced the housing market. They fell below 3% in July 2020 and remained there until September 2021, a rare occurrence since data collection began in 1971. The effects of this period are felt even today, as the share of mortgages exceeding 6% has grown by more than 4 percentage points from the third quarter of 2024 to the third quarter of 2025, signifying ongoing buyer activity amidst elevated borrowing costs.
Housing Supply Trends and Market Balance
Recent improvements in housing supply are moving the national market towards a more balanced state, with some localities experiencing conditions more favorable to buyers. However, inventory remains tight, particularly in affordable segments where rapid sales continue amidst high competition. According to Danielle Hale, Chief Economist at Realtor.com®, "Even with rates still elevated, modest mortgage rate decreases could encourage additional homebuying activity."
The Enduring Lock-In Effect
Currently, approximately 80% of outstanding mortgages remain under 6%, showcasing the ongoing impact of the rate lock-in phenomenon. However, the fact that mortgages above 6% now outnumber those below 3% signifies a critical inflection point in the housing market, suggesting a gradual easing from the ultra-low-rate era.