More than six out of 10 mortgages across the US are rooted at rates below 4%, Freddie said, with fixed-mortgage-rate homeowners having locked in around $66,000 on average per household. “Selling means giving up those savings,” it said.
An especially noteworthy finding from the report was that millennials and the Gen X cohort generally have low mortgage rates – but there’s still potential for refinancing among those generations.
While millennials have a low homeownership rate compared with baby boomers and Gen Xers, “the sheer number of millennial borrowers with rates [higher than] 7% is high,” the report noted. With all generations combined, “over two million mortgage borrowers have rates above 7%, with over 1.2 million borrowers from the Millennial and Gen X cohorts.”
Rates falling under 6.5% would bring an additional 1.4 million borrowers to a rate higher than 6.5%, Freddie said, mainly within Generation X homeowners, further boosting the number of potential refinances.
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