Over 80% of mortgages are under 6%

Borrowed from Odeta Kushi, VP Deputy Chief Economist at First American Corporation

Recently released Q3 2024 NMDB data reveals:

21.3% of mortgaged homes have a rate < 3%
33.9% have a rate 3.0 - 3.99%
18.1% have a rate 4.0 - 4.99%
9.5% have a rate 5.0 - 5.99%
17.2% have a rate >= 6.0%

82.8% of mortgaged homes have a rate below 6%, that's down from the peak of 92.7% in Q2 2022. The share of mortgaged homes with a rate above 6% is the highest since Q4 2016.

The lock-in effect will continue to limit market potential in 2025, but it’s not the only factor. While financial considerations are crucial in deciding to buy or sell a home, lifestyle choices and events—such as death, divorce, diplomas, downsizing, and diapers—also play a significant role. Mortgage rates are unlikely to drop enough next year to ‘unlock’ most homeowners. Therefore, the driving force behind sales activity will remain the five Ds.