A third of homeowners won’t give up sub-6% rate ‘for any reason’ 

While there are some indications that the pandemic-era mortgage rate lock-in effect is easing, many homeowners who did nab lower rates are still resistant to walking away from them — especially with 30-year rates holding stubbornly above 6%.

According to recent surveys from Clever Real Estate and Hippo, a majority of homeowners have regrets about their last home purchase or the loan they took on to afford it. But while some are tempted to seek greener pastures, it'll take the right rate at the right time for many future buyers to consider a move.

The sub-6% group: An estimated 76% of homeowners have mortgage rates under 6%, according to a February survey of 1,000 American mortgage holders from Best Interest Financial and Clever Real Estate. Older generations are more likely to have lower rates, with 47% of baby boomers reporting rates under 4% compared with 30% of millennials.

Of those with sub-6% mortgages, 48% are "unwilling" to give up their comparatively low rate and 35% wouldn't trade it "for any reason" — that share goes up to 52% among homeowners with rates under 3%. One in 5 respondents with rates below 6% said they would be willing to walk away for a significant life change; a drop in home prices, however, would only sway 1 in 10 homeowners.

Nearly half of respondents (47%) said they are unsure about their ability to afford a loan at current mortgage rate levels, while 44% are staying put longer because current rates are too high for them to afford to move.

To consider selling, mortgage rates would need to fall below 4% for 2 in 5 homeowners with sub-6% mortgages and below 3% for 1 in 5 homeowners, the survey found.

Some still determined to move: Despite rate pressures, about 1 in 10 respondents said they do intend to move within the next two years. That group cited interests in moving to a new city or state (34%), downsizing (32%) or finding an area with lower property taxes as their main reasons for wanting to move.

Another survey published earlier this month by Hippo found that nearly 1 in 3 homeowners (32%) plan to move within the next five years, with respondents sharing similar interests in downsizing or moving to a new location.

But generational divides exist here as well, with Hippo finding that 47% of Gen Zers and 43% of millennials want to move soon compared with 30% of Gen Xers and 18% of baby boomers.

Buyer regrets: Those who are exploring the possibility of moving appear to be driven in part by regret — either about their most recent home purchase or the loan they took on to close the deal.

About half (52%) of all Clever respondents regret their mortgages, a share that jumps to 75% among those with rates over 6%. One in 10 wish they'd considered other lenders, with other common regrets including not buying or refinancing when rates were lower, not negotiating their loan terms and not making a bigger down payment.

Meanwhile, 67% of Hippo survey respondents with plans to move in the next five years said they regretted buying their last home, with the costs of homeownership and high mortgage rates cited as major factors.