Estimated read time: 2-3 minutes
- About 80% of Americans have mortgages below 6%, but this is expected to drop.
- Realtor.com predicts rates will remain above 6% in 2025, affecting inventory.
- Utah has 71.9% of mortgages locked below 4%, impacting housing market dynamics.
SALT LAKE CITY — Mortgage rates have been above 6% in the U.S. since September 2022, but 82% of Americans have rates below that benchmark, Realtor.com reported Wednesday.
However, the percentage of mortgages under 6% is expected to drop over the coming months, says Hannah Jones, senior economic research analyst for the website licensed by the National Association of Realtors.
"Looking at the year ahead, we expect that by the end of 2025, the share of mortgages below 6% could fall close to 75%," Jones said. "Put differently, we expect the share of mortgage holders with a rate of 6% or higher to increase by roughly 8 percentage points."
Last December, Realtor.com reported the share at 84%, down from 89% one year earlier and even further from the mid-2022 high of 92% of Americans sitting on mortgages with a rate below 6%.
As of March 27, the U.S. weekly average 30-year fixed-rate mortgage rate was 6.65%, according to Freddie Mac, the Federal Home Loan Mortgage Corporation. The rate, down slightly from the previous week, reached a recent high of 7.04% in January.
That high came after rates went up through most of the final quarter of 2024, Jones said, and "have remained above 6% since September 2022, keeping many would-be sellers 'locked-in' and hindering total inventory recovery."
The Realtor.com 2025 Forecast for Key Housing Indicators predicts that rates will remain above 6% in 2025, averaging 6.3% and ending the year at 6.2%.
At the same time, housing supply has remained below pre-COVID-19 pandemic levels, leading to competition among buyers that drives up prices. Still, Realtor.com is forecasting an 11.7% increase in inventory this year, compared with 2024.
"Easing inflation and mortgage rates will be key drivers of seller activity, which will relieve some of the price pressure and competition," Jones said.
In Utah, a whopping 71.9% of mortgages are locked in at 4% or lower, the University of Utah's Kem C. Gardner Institute has found. Dejan Eskic, a housing analyst at the institute, has called the phenomenon "golden handcuffs."
Nationally, just 54.1% of mortgage holders had a rate of 4% or lower, Realtor.com reported.
Zions Bank Mortgage Manager Jeremy Holmgren said the high percentage of Utahns with such a lower rate is a "very interesting stat" that means "very few of them are going to leave that low interest rate and buy a different home so it's minimizing the buyer out there."
