The Blubber

This is because 91.8% of U.S. homeowners with mortgages are paying interest rates below 6%, having secured low-cost financing before rates surged in mid-2022.

The percentage of homeowners with a mortgage rate under 6% is just shy of the record 92.9% set in mid-2022.

With the average 30-year fixed mortgage rate at 6.71% this week—remaining near a two-decade high—most homeowners are reluctant to enter the market and face the prospect of financing a new home at higher rates.

According to Redfin, 82.4% of homeowners are locked in at rates below 5%, and 62% have rates under 4%. Moreover, 23.5% of homeowners have mortgage rates below 3%, one of the highest percentages on record.

Redfin suggests that these statistics are key factors in the current shortage of new home listings. Both new and total home listings have plummeted to record lows for this time of year.

This lack of inventory is driving competition among buyers and keeping home prices elevated.

As mortgage rates remain high and could increase further, fewer homeowners are expected to sell and re-enter the market. Without more inventory, U.S. home prices could continue to inflate.

Edward Seiler, associate vice president for housing economics at the Mortgage Bankers Association, told Insider that housing affordability for new buyers is at an all-time low.

The association’s Purchase Applications Payment Index reached a record high in June, signaling worsening affordability due to rising loan amounts, higher rates, or stagnant incomes.

“For new home buyers, this is the worst situation since the end of the Great Recession,” Seiler said. “Current homeowners with a 2.75% interest rate from 2022 are in a great spot, but for first-time buyers or those looking to move, it’s a daunting scenario.”