The share of U.S. homeowners with high rates on their mortgages has jumped sharply in just the last few years.
That’s having a marked impact on the refinance market and a somewhat more muted impact on home sales. Rates have been front and center in the debate over how to improve home affordability — and for good reason.
In 2022, after mortgage interest rates hit more than a dozen record lows, sparking a refinance bonanza, barely 10% of homeowners had 30-year fixed mortgages with rates above 5%. Just four years later, that share has jumped to over 30%, according to ICE Mortgage Technology. About 20% of borrowers have mortgages with a rate over 6%.
Home sales have been less than robust over the last few years, with the National Association of Realtors reporting a historically low 4.06 million sales last year, basically unchanged from 2024. This, after hitting a 15-year high of 6.12 million home sales in 2022.
More recent sales, combined with some cash-out refinancing, pushed the share of higher-interest-rate borrowers up.
