86% of Mortgages Have a Rate Below 6%

86% of Mortgages Have a Rate Below 6%

According to a report by the FHFA National Mortgage Database Aggregate Statistics, 85.6% of mortgaged homes have a rate below 6%, down from the peak of 92.8% in the 2nd quarter or 2022.

Key Points:

• Strong Borrowers: The average credit score among borrowers with an active loan is an impressive 743.

• Low Foreclosure Risk: Only 0.3% of borrowers have negative equity.

• Improved Loan-to-Value Ratios: National LTV ratio improved to 48.3% from 70% a decade ago.

• Outstanding Mortgages: At the end of Q1 2024, there were 50.8 million outstanding mortgages with unpaid balances totaling $11.7 trillion.

Ralph’s Take

Despite concerns that homeowners wouldn't list their properties due to low interest rates; we're seeing a positive shift. Nationally, new listings have spiked nearly 10% year-over-year. The big takeaway? Current mortgage holders are thriving. They boast high credit scores, low LTVs, minimal ARMs, and substantial equity. Current homeowners are in excellent financial shape.