Key findings (DealMachine mortgage data, October 2026)
- Of the 4.76 million first mortgages recorded in 2026, 86% carry a rate between 6% and 7%. Only 0.9% are under 4%.
- Among first mortgages recorded since 2010, loans at 7% or more are 2.1 times as likely to be absentee-owned as loans under 4% (36.8% vs. 17.7%).
Housing inventory is low because about half of U.S. homeowners have a mortgage rate they don't want to give up. According to the Federal Housing Finance Agency (FHFA), 50.6% of U.S. mortgages had a rate under 4% at the end of 2025. Selling means trading it for a loan at today's rates, so they stay put.
That's the lock-in. Our data shows it's starting to break, and which owners feel the most pressure.
Why Housing Inventory Is Frozen
Here's how I think about it. A $300,000 loan at 3% costs about $1,265 a month in principal and interest. The same loan at 6.5% costs about $1,896. That's roughly $630 more every month for the same amount of debt.
Most people won't take that deal unless a job move, a divorce, or a growing family forces it. Fewer sellers means fewer listings, and fewer listings means low inventory.
The FHFA data also shows the other side. As Wolf Street reported from FHFA figures, 21.9% of mortgages carried a rate of 6% or higher in Q4 2025, the highest share since 2015.
How We Measured This
This analysis uses recorded first mortgages in DealMachine's property data, split into two groups:
- 2026 loans: first mortgages recorded so far in 2026 (4,759,590 loans).
- Loans since 2010: first mortgages recorded from 2010 on (59,672,845 loans).
The rate is the one stated on the county mortgage document. For adjustable-rate loans, that's the starting rate. Records under 1% were excluded as likely data errors. "Absentee-owned" means the owner's mailing address doesn't match the property, which usually points to a landlord.
Why start at 2010? Old, paid-off loans can linger in county records. Across all years, more than half of the 3.38 million loans at 7%+ were recorded before 2010. Removing them gave a cleaner picture, and the landlord gap got wider.
These figures cover recorded first mortgages, not every homeowner in the country. National market shares in this post come from the FHFA.
The Lock-In Is Breaking
Nearly every new mortgage in 2026 lands in one narrow band.
| Rate | Loans recorded in 2026 | Share |
|---|---|---|
| Under 4% | 41,884 | 0.9% |
| 4–6% | 576,722 | 12.1% |
| 6–7% | 4,096,088 | 86.1% |
| 7%+ | 44,896 | 0.9% |
| Total | 4,759,590 | 100% |
86.1% of loans recorded this year sit between 6% and 7%. Only 0.9% are under 4%. For new borrowers, the sub-4% mortgage is close to gone.
Here's the part that matters. Every time a locked-in owner sells or refinances, a sub-4% loan disappears, and a 6–7% loan replaces it. Almost nothing new is joining the low-rate group, so it can only shrink.
It's shrinking slowly. Wolf Street describes the thaw as happening "at a snail's pace." But the direction is clear, and the lock-in effect weakens a little more every month that rates stay above 6%.
Who Pays the Most: Landlords at 7%+
| Rate group | Loans | Absentee-owned | % absentee |
|---|---|---|---|
| Under 4% | 31,017,333 | 5,486,730 | 17.7% |
| All loans | 59,672,845 | 13,238,142 | 22.2% |
| 7%+ | 1,551,442 | 570,963 | 36.8% |
Among loans recorded since 2010, 36.8% of loans at 7% or higher belong to absentee owners. For loans under 4%, it's 17.7%. That makes a high-rate loan 2.1 times as likely to be held by a landlord.
This is normal when you think it through. Loans on investment properties usually carry higher rates than loans on a primary home. Many investors also bought or refinanced in 2023 and 2024, when average 30-year rates came close to 8%.
The result is 570,963 absentee-owned properties with a first mortgage at 7% or higher. If you're also tracking adjustable-rate loans, our ARM reset index by state covers that group.
What This Means for Investors
The data points to two lists, each with its own approach.
List 1: Absentee owners at 7%+
These are landlords under payment pressure. A $250,000 rental loan at 7.5% costs about $1,748 a month in principal and interest, before taxes, insurance, and repairs. If rents in the area have flattened, that property may lose money every month.
They also have less emotional attachment to the home, which makes them the most likely sellers in this data. Lead with a clean offer and an easy exit. Our guide to absentee owner lists covers how to work them.
List 2: Owners under 4%
These owners won't sell to get a better rate. But some still need to sell because of a move, a divorce, or a repair they can't afford. That's where subject to real estate deals come in. You take over the deed and keep paying the seller's existing low-rate loan. Here's a full breakdown of buying subject to a mortgage.
The key takeaway: a 3% loan is an asset to a buyer, even when it traps the seller. Compare subject-to vs. assuming a mortgage, or look at other creative financing strategies.
How to Build Both Lists in DealMachine
Both lists take a few minutes in DealMachine's list builder. Here's the process.
- Pick your market by county, city, or ZIP code.
- Add the 1st Mortgage Interest Rate filter. Set it to 7% or higher for List 1. For List 2, set it from 1% to under 4%.
- Add 1st Mortgage Recording Date and set it to 2010 or later. This removes old loans that may already be paid off.
- For List 1, turn on Absentee Owned. For List 2, it's optional.
- Skip trace the owners and start your outreach.
One tip for List 2: add an equity filter. Subject-to deals tend to work best when the owner has little equity, because there's less cash needed to close the gap.
Find the 570K+ landlords paying 7%+ on homes they don't live in, and reach them before they list. Build your list in DealMachine.
Frequently Asked Questions
What is the rate lock-in effect?
It's when homeowners avoid selling because their current mortgage rate is much lower than today's rates. FHFA data shows 50.6% of U.S. mortgages were under 4% at the end of 2025.
Why is housing inventory so low?
Mostly because owners with low-rate mortgages aren't listing. About half of U.S. mortgages are under 4%, according to the FHFA, while new loans in 2026 are mostly between 6% and 7%. That gap keeps many would-be sellers off the market.
Will mortgage rates go down enough to end the lock-in?
Nobody can promise that. Even if rates fall, an owner with a 3% loan has little reason to move unless rates drop close to that level. The lock-in fades as low-rate loans get paid off through sales and refinances, and that's happening slowly. In DealMachine's data, only 0.9% of first mortgages recorded in 2026 are under 4%, so the low-rate group keeps shrinking either way.
How do I find homeowners with high-rate mortgages?
In DealMachine, filter by 1st Mortgage Interest Rate (7% or higher) and 1st Mortgage Recording Date (2010 or later). Add the Absentee Owned filter to focus on landlords.
What is a subject-to deal?
In a subject-to deal, the buyer takes ownership of the property while the seller's existing mortgage stays in place. The buyer makes the payments on that loan. It's popular with low-rate loans because the buyer keeps that rate. Know the risks before you try one, including the lender's due-on-sale clause.