The popular real estate saying “marry the house, date the rate” has paid off for many in the past. Millions of homeowners took advantage of record-low mortgage rates in 2020 and 2021 by refinancing, often shaving hundreds of dollars off their monthly payments.
But the landscape has shifted. Mortgage rates haven’t dipped below 6% since September 2022, and economists don’t anticipate a return to the ultra-low levels seen just a few years ago.
With borrowing costs remaining elevated, many who planned to refinance within a year or two are now stuck. The housing market is increasingly split between those who locked in low rates earlier and newer homeowners now facing higher monthly payments.
Brad Glenn, pictured with his wife Amanda, says he regrets not refinancing last September when rates temporarily dropped.
According to data from Intercontinental Exchange, about 7.5 million households currently hold mortgage rates of 6.5% or more, most of them having originated those loans since 2022. Typically, borrowers aim for at least a half-point reduction to make refinancing worthwhile, given the closing costs involved.
While tighter lending standards today reduce the risk of widespread foreclosures—as seen during the 2007–2009 financial crisis—higher rates are still creating stress for some homeowners. In certain areas like Texas and Florida, home prices are slipping, leaving some owners underwater on their mortgages.
Additionally, rising property taxes and insurance premiums are inflating monthly payments. Without a corresponding increase in income, some homeowners may no longer qualify for refinancing even if rates fall.
“There is definitely a buyer pool that is feeling the constraints of the rates that they’re in and bummed that they can’t refinance,” said Stacey Melton, vice president at Reasy Financial in Peoria, Arizona. “I’m still getting calls on the daily from people who want to refinance, and it just unfortunately isn’t making sense for them.”
A recent survey from Clever Real Estate found that one in five Americans who purchased a home since early 2023 regrets taking on a mortgage at such a high rate.
Rates began to spike in 2022 after the Federal Reserve aggressively raised short-term interest rates in an effort to curb inflation. At the time, many analysts expected inflation to ease quickly—but it proved more persistent than forecasted.
Some homeowners are only now starting to feel the financial squeeze. Since 2022, around 2% to 3% of new mortgages have included temporary buydowns—arrangements that reduce the interest rate for the first year or two—according to the AEI Housing Center at the American Enterprise Institute. As those buydown periods expire, monthly payments increase, stretching household budgets even further.
