According to one study, nearly 9 out of 10 homeowners in the United States have mortgage interest rates below 6%. new report From real estate company Redfin.
Approximately 88.5% of mortgage interest rates were below 6%, down from a high of 92.8% in the second quarter of 2022, according to the report.
More than three-quarters (78.7 percent) of homeowners have mortgage rates below 5 percent, and nearly six in 10 (59.4 percent) have mortgage rates below 4 percent. According to Redfin, only 22.6% of people have mortgage rates below 3%.
With the average mortgage interest rate currently sitting at 6.66%, many homeowners are choosing to hold on to their homes to avoid rising interest rates, resulting in a phenomenon known as the “lock-in effect.” Redfin said this is adding to the nation's housing shortage.
“Despite an increase in the number of listings, there remains a housing shortage that leaves many sellers worried about finding their next home. It's part of why we're here,” David Palmer, a Redfin Premier real estate agent in Seattle, said in a statement.
However, real estate companies say mortgage rates have fallen compared to earlier this year after rising to nearly 8% in October, and some homeowners are considering selling.
“This is typical for January, and mortgage rates have come down, so sellers are really starting to move in,” Palmer said.
“They are also coming to terms with the fact that interest rates will not go back to 3.” [percent] It will be easier to pull the trigger on a sale anytime soon,” he added.
Mortgage rates have risen over the past two years in parallel with interest rates that the Federal Reserve has repeatedly raised to curb persistently high inflation. However, the central bank appears to be nearing the end of its rate hike campaign after leaving interest rates unchanged for the past three consecutive meetings.
Financial markets also have high expectations that the Fed will begin lowering rates before the end of the year, after most Fed officials indicated in their December economic outlook that they expect at least two rate cuts in 2024. There is.
Redfin's report is based on third quarter 2023 data from the Federal Housing Finance Agency's (FHFA) National Mortgage Database.
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