For the first time in years, more U.S. homeowners now hold mortgage rates above 6% than below 3%, according to The Washington Post. The milestone marks a shift in one of the most persistent dynamics holding back the housing market: the so-called mortgage lock-in effect that has kept millions of Americans from selling their homes.
When interest rates began climbing in 2022, homeowners who had secured loans with rates below 3%—common in 2021 and earlier—chose to stay put. Trading up meant paying hundreds more a month for a similar property, discouraging moves and restricting inventory.
“Even a sub-5% rate would make sellers think carefully before moving,” Redfin Chief Economist Daryl Fairweather told the Post. “It’s probably going to be another four, five years of it being a major factor in the housing market.”
That reluctance contributed to a tight supply of existing homes. The National Association of Realtors’ data, available through the St. Louis Fed’s FRED database, shows that 3.9 million existing homes were sold in June 2025, rising modestly to 4.1 million by November—a small but notable gain after years of sluggish movement.
The easing could continue if the balance of mortgage holders continues to shift toward higher rates. As more people face loan terms above 6%, the financial incentive to stay put weakens. Combined with moderating price growth—median home prices climbed from $317,100 in mid-2020 to $410,800 by mid-2025—the market may be entering a new phase where more existing houses finally return to circulation.
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