Core Insights - The share of U.S. homeowners with mortgage rates above 6% has surpassed those with rates below 3%, indicating a significant shift in the housing market after years of low borrowing costs [1][2][9] Mortgage Rate Trends - In Q3 2025, 21.2% of outstanding mortgages had interest rates of 6% or higher, compared to 20.0% with rates below 3% [2] - Mortgage rates have decreased from a peak of 7.04% in January 2025 to the low-6% range by the end of the year, but have remained above 6% since September 2022 [2][6] Homeowner Behavior - The transition to higher-rate mortgages reflects a gradual adjustment as some households exchange low-rate mortgages for higher-rate loans or enter the market for the first time, despite the rate lock-in effect limiting inventory recovery [3][4][6] - More than half (51.5%) of outstanding mortgages still have rates at or below 4%, contributing to homeowner hesitance to sell, as moving would increase monthly payments significantly [4] Market Dynamics - The share of mortgages with rates above 6% has increased by over 4 percentage points from Q3 2024 to Q3 2025, indicating ongoing buyer activity despite high rates [6] - Housing supply has improved, leading to a more balanced national market, although inventory remains constrained in affordable areas [7] Future Outlook - Modest decreases in mortgage rates into the low-6% range could stimulate additional homebuying activity, with easing inflation and mortgage rates being crucial for increasing seller participation [8]