(The Epoch Times)—The share of homeowners with 6 percent or more mortgage rates is at its highest level in nearly a decade, according to real estate brokerage Redfin, which added that the “lock-in effect” in the housing market has started to ease.
The company said 17.2 percent of homeowners have a 6 percent or higher rate, which is the largest proportion since 2016.
“That’s up nearly five percentage points from 12.3 percent in the third quarter of 2023,”the company said in a Feb. 6 statement. “If this growth rate were to continue, which is feasible, the share of homeowners with a rate of at least 6 percent would nearly double in the next three years.”
Meanwhile, the share of homeowners with an interest rate less than 6 percent stands at 82.8 percent. As such, an even higher share of owners have a rate below the Jan. 30 weekly average rate of 6.95 percent, said the report. This is “prompting many to stay put instead of selling and buying another home at a higher rate.” The phenomenon, called the “lock-in effect,” dries up housing supply, thus supporting price growth and contributing to the affordability crisis.
However, the lock-in effect is showing signs of easing as “it’s not realistic to stay put forever” for most individuals,” Redfin stated. Many people are opting to move despite the higher rates because of major life events like a divorce or job change that leave them with no choice, Redfin said, citing its agents.
“Many Americans are growing accustomed to the idea that rates are unlikely to fall to pandemic lows anytime soon,” the Redfin report stated.
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Rates hit a record low of 2.65 percent during the COVID-19 pandemic, the brokerage said. The average weekly rate for a 30-year fixed-rate mortgage has remained above the 6 percent level for more than two years, according to data from Freddie Mac.
Moreover, the “pandemic surge in home values means many homeowners have enough equity to justify selling and taking on a higher rate—especially if they’re downsizing or moving somewhere more affordable,” said the report.
Data from the Federal Reserve Bank of St. Louis shows that the average sales price of houses sold in the United States in Q1, 2020, was $383,000. This has jumped more than 33 percent to $510,300 as of Q4, 2024.
Growing Rental Market
Mortgage applications to buy homes have declined amid high rates. According to the Mortgage Bankers Association (MBA), while overall mortgage applications rose 2.2 percent for the week ending Jan. 31 compared to a week back, the jump was driven by a 12 percent increase in refinances.
“Purchase activity had a tougher week, with declines across all loan types,” said MBA Deputy Chief Economist Joel Kan. “The average loan size for a purchase loan has increased since the start of the year.”
Mortgage purchase applications over the last two weeks are “modestly above what we saw a year ago,” he said. This suggests there is “some latent demand in the market.”
There are currently 110,727 new single-family build-to-rent homes under construction in the United States across 613 communities, according to the report.
State-wise, Texas had the highest number of build-to-rent homes under development, with 21,812 homes at various stages of construction. It was followed by Arizona and Florida with nearly 14,000 properties, and North Carolina with more than 12,000 units.
Doug Ressler, manager of business intelligence at Yardi Matrix, a sister company of Point 2Homes, said renting a build-to-rent home is cheaper on average than buying a starter home.
“Recent reports indicate that renting can save one around $1,000 per month compared to buying. This is largely due to high mortgage rates and elevated home prices,” Ressler said.
“More and more build-to-rent (BTR) residents consider themselves renters by preference compared to 2023 (36 percent in 2024 vs. 27 percent in 2023).”
Independent Journalism Is Dying
Ever since President Trump’s miraculous victory, we’ve heard an incessant drumbeat about how legacy media is dying. This is true. The people have awakened to the reality that they’re being lied to by the self-proclaimed “Arbiters of Truth” for the sake of political expediency, corporate self-protection, and globalist ambitions.
But even as independent journalism rises to fill the void left by legacy media, there is still a huge challenge. Those at the top of independent media like Joe Rogan, Dan Bongino, and Tucker Carlson are thriving and rightly so. They have earned their audience and the financial rewards that come from it. They’ve taken risks and worked hard to get to where they are.
For “the rest of us,” legacy media and their proxies are making it exceptionally difficult to survive, let alone thrive. They still have a stranglehold over the “fact checkers” who have a dramatic impact on readership and viewership. YouTube, Facebook, and Google still stifle us. The freer speech platforms like Rumble and 𝕏 can only reward so many of their popular content creators. For independent journalists on the outside looking in, our only recourse is to rely on affiliates and sponsors.
But even as it seems nearly impossible to make a living, there are blessings that should not be disregarded. By highlighting strong sponsors who share our America First worldview, we have been able to make lifelong connections and even a bit of revenue to help us along. This is why we enjoy symbiotic relationships with companies like MyPillow, Jase Medical, and Promised Grounds. We help them with our recommendations and they reward us with money when our audience buys from them.
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Even our faith-driven precious metals sponsor helps us tremendously while also helping Americans protect their life’s savings. We are blessed to work with them.
Independent media is the future. In many ways, that future is already here. While the phrase, “the more the merrier,” does not apply to this business because there are still some bad actors in the independent media field, there are many great ones that do not get nearly enough attention. We hope to change that one content creator at a time.
Thank you and God Bless,
JD Rucker
