With the market shift and rising interest rates, there has been speculation about the number of homeowners locked into low mortgage rates.

A new Redfin report shows just how many. 

Based on an analysis of first quarter 2022 data from the FHFA’s National Mortgage Database, the report found that nearly 62% of households today have an outstanding mortgage. 

Of those homeowners, 85% have an interest rate below 5%—significantly less than today’s rates of 6% and higher. 

Homeowners with Rates Below 5%

Some states have an even higher percentage of homeowners locked into low mortgage rates. This is partly due to increased net migration rates over the past two years. 

The top five states with homeowners with mortgage rates below 5% are:

  • Utah (93%)
  • Colorado (92%)
  • Idaho (92%)
  • Oregon (91%)
  • Montana (91%)

States with the lowest percentage of homeowners with mortgage rates below 5% are:

  • West Virginia (77%)
  • Mississippi (78%)
  • Louisiana (80%)
  • New York (80%)
  • Oklahoma (82%)

In every state, more than 75% of homeowners benefit from mortgage rates below 5%. This makes some homeowners feel like they are locked in not just to their rate—but their house. 

Lock-in Effect

This month, interest rates have climbed past 6% for the first time since 2008. Compared to the low of 2.65% in January 2021 and 3-4% in the past two years, this increase adds hundreds of dollars to monthly mortgage payments. 


Homeowners with low mortgage rates are hesitant to sell their homes because they don’t want a higher mortgage rate. This is evident in the recent decrease in new listings

At the same time, buyers are slowing down their searches due to affordability issues. The pause on both ends creates something like a stalemate—with both buyers and sellers feeling stuck. 

The plunge in new listings is hindering growth in housing supply, which is keeping home prices relatively high even though the market is slowing down. Housing supply fell 1% in August from the month before; normally, it would rise during a downturn.

Taylor Marr

Redfin Deputy Chief Economist

Reason to Sell

In any market, there are reasons to sell. People relocate for jobs, expand their families, or opt to downsize throughout different stages of their lives. 

Aside from lifestyle, other homeowners have a financial incentive to sell today. Many built  significant home equity due to rising housing prices throughout the pandemic. Some are opting to cash out now, even if it means taking a higher interest rate for their next mortgage. 

So while you can no longer expect to have new clients blowing up your phone, there are still transactions taking place. Your work in this market involves educating consumers on the data, creating as many new leads as possible, and following up until you convert