FHFA: 73% of Mortgages Still Under 5%

FHFA: 73% of Mortgages Still Under 5%

The highest level of mortgages over 6% since 2016.

While mortgage rates remain significantly higher than three years ago, the pool of borrowers with lower-rate loans is steadily eroding as most new homeowners are securing loans in the 6% to 7% range. The Federal Housing Finance Agency (FHFA) reports that 73.3% of U.S. mortgage holders now enjoy interest rates below 5.0%, a drop of 12.2 percentage points from the Q1 2022 high of 85.5%.

As borrowers adjust to the new normal, opportunities for refinancing may continue to emerge. A glimpse of this occurred in September 2024 when the average 30-year fixed rate briefly dipped to 6.11%. Savvy homeowners with higher-rate loans seized that window to refinance, reducing their monthly payments and bolstering their financial footing.

Ralph’s Take

Buy When You're Ready, Not When the Market Is Perfect. With mortgage rates fluctuating between 6% and 7%, continued volatility is expected this year. While waiting for stability and lower rates may seem prudent, it risks missing the right home. A home is a long-term investment, and refinancing later can adjust your terms. Timing the market isn’t as important as finding the home that meets your needs and improves your quality of life.