Only a tenth of mortgages have an interest rate above 6% — that’s a big problem for the U.S. housing

Mortgage rates are inches away from 7% — but less than a tenth of U.S. homeowners have a home loan at that rate.

In fact, only 9% of all existing mortgages in the U.S. were taken out with a rate of above 6%, according to data from the Federal Housing Finance Agency, and analyzed by Torsten Slok, chief economist of Apollo Global Management.

Around a quarter of all mortgages — 23% — have a rate of less than 3%, Slok added, and 38% homeowners have a mortgage rate of between 3% and 4%.

In other words, the vast majority of U.S. homeowners have low mortgage rates.

Millions of homeowners took advantage of ultra-low rates during the pandemic to lower their monthly payments. A recent study by the New York Fed found that 14 million outstanding mortgages were refinanced during the pandemic years.

and the 30-year was averaging at 6.96% as of July 13, according to Freddie Mac FMCC, +2.72%.

The supply of new homes has been severely constrained by this imbalance between current rates and lower rates held by the majority of homeowners. New listings — a measure of how many sellers were putting up their homes for sale — were down 27% in early July versus a year ago, according to data from Realtor.com NWSA, -1.87%.

https://www.marketwatch.com/story/only-a-tenth-of-mortgages-have-an-interest-rate-above-6-thats-a-big-problem-for-the-u-s-housing-market-36d1029e