One of the biggest supply-side impediments to a US housing market thaw is the so-called “golden handcuff” effect wherein mortgaged homeowners are reluctant to “trade” a three-handle rate for a six-handle.

For the better part of four years, that dynamic was blamed for a shortage of resale supply. When rates peaked near 8%, the psychology was so daunting as to virtually foreclose (no housing pun intended) the possibility of supply normalization.

Fast forward to 2026 and rates north of 6% are becoming less anomalous, even as they remain more exception than rule.

The figure above, which utilizes FHFA data highlighted this week by Redfin, shows that as of Q3 2025, more than one in five US mortgages carried a rate above 6%, triple the share from Q2 2022.

This isn’t just trivia for the sake of it. As Dana Anderson noted, Q2 and Q3 of 2025 marked the first time since the pandemic housing boom that more US homeowners had a rate north of 6% than those enjoying a rate below 3%.

In other words: “High” (with the scare quotes to acknowledge that 6% or even 7% isn’t draconian from a historical perspective) rates are now more prevalent than ultra-low rates.

The implication for home sales is fairly straightforward. “The lock-in effect is fading,” as Anderson put it. “Now that rates have been above 6% for much longer than they were under 3%, many people have grown accustomed to high rates and decided to move on, which is reflected in the rise in new listings over the last year.”

That’s the supply effect I mentioned here at the outset. And the more supply there is absent a concurrent increase in demand, the more downward pressure on prices, or at least the more leverage buyers command.

But that classical, Econ 101 take leaves out the down payment hurdle, which is simply too high for many would-be homeowners, particularly GenZers with no preexisting home equity.

Rates slipped below 6% last week for the first time since early September 2022, which means some of the people counted in the chart above can reduce their monthly payments (or, ideally, keep the same payment but cut the term of the loan, thereby accelerating the pace of equity accumulation). But as discussed here, the down payment burden may ultimately mean that lower rates and supply increases are insufficient to catalyze a meaningful uptick in sales.

Apropos, Anderson on Thursday wrote that between “high prices and economic uncertainty,” house hunters are still “on the sidelines.”

Insult to injury, she went on, “rates are already rising again” in part due to the Iran war, which pushed up bond yields earlier this week. “Global tensions could add to homebuyer hesitation,” she said.