For the first time in years, more homeowners have a 6% mortgage rate than a 3% one. That’s great news for frustrated buyers.

Core Insights - The housing market is experiencing a significant shift as more homeowners are taking on mortgages with rates of 6% or higher, marking a departure from the previous era of low rates [1][5]. Group 1: Lock-in Effect and Market Dynamics - The "lock-in effect" has caused homeowners with low mortgage rates to hesitate in selling their homes, leading to a constrained housing market and rising home prices, which has created affordability challenges for many buyers [2][4]. - As of the third quarter of 2025, there are more homeowners with mortgages at 6% or higher than those with rates below 3%, indicating a major change in the market dynamics [5][9]. - The average interest rate for a 30-year mortgage rose to 6.6% in the first quarter of 2025, up from 3.7% in the same period in 2020, contributing to the increase in housing inventory as the lock-in effect fades [14]. Group 2: Regional Variations in Lock-in Effect - Homeowners in states with higher housing costs, such as California, Hawaii, and Utah, are more likely to be locked in with lower mortgage rates, as selling their homes could lead to significantly higher monthly payments [15][16]. - The property-tax rule in California, Proposition 13, further incentivizes homeowners to remain in their properties, as it caps property tax increases, creating a second lock-in effect [17][18]. - Conversely, states like Mississippi, Oklahoma, and West Virginia show a higher willingness among homeowners to take on 6% mortgages, likely due to lower housing costs and increasing homeownership expenses [19][20]. Group 3: Homeownership Trends - Approximately 40% of U.S. homeowners own their homes free and clear, which means the lock-in effect does not apply to them, allowing for more flexibility in selling their properties [23][24]. - The trend of rising home-insurance costs, particularly in states like Mississippi, is also influencing homeowners' decisions regarding mortgage rates and homeownership [21].