Date the Rate” Backfires: Millions of Homeowners Trapped in High-Rate Mortgages
Date the Rate” Backfires: Millions of Homeowners Trapped in High-Rate Mortgages
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July 8, 2025 | New York City
Millions of Americans who bought homes during the post-2022 housing rush are now stuck with mortgage rates above 6.5% — and little relief in sight. According to Intercontinental Exchange, about 7.5 million households hold these high-rate loans, most of whom hoped to refinance when rates dropped. But rates have instead hovered near 6.6%, dashing hopes for relief and straining monthly budgets.
Temporary rate buydowns on some loans are expiring, triggering payment increases for recent buyers. Meanwhile, refinancing only makes financial sense when borrowers can lower their rate by at least 0.5%, which is no longer feasible for most.
One in five Americans who purchased a home since 2023 now regrets their rate decision, according to a survey from Clever Real Estate. Some are attempting workarounds — like recasting loans or switching to ARMs — but falling home values in some markets (especially in Texas and Florida) make it tough for underwater borrowers to refinance at all.
Despite the strain, widespread foreclosures are unlikely, thanks to tighter lending standards since 2008. Still, with the Fed unlikely to cut interest rates this month after a strong jobs report, homeowners may have to live with higher payments for longer than they hoped.
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