You know, I've been watching the mortgage market closely, and according to Realtor.com Research, we're seeing what they call a "slow unlock" of the housing market in early 2026. What's happening is that rates dipped below 6% in the first quarter, briefly touching 5.98% by late February before jumping back up in March. This means some well-qualified buyers were able to lock in rates below 6% during that window, which is starting to shift the overall picture. Right now, about 78% of all outstanding mortgages have rates below 6%, but here's the key number: 22.1% are sitting at 6% or higher, up about 3 percentage points compared to a year earlier.
Here's what really strikes me about the current situation. Nearly half of all mortgages, about 49.9%, still carry rates of 4% or lower. That's the Covid-era refinancing wave we all remember, and according to the research, these borrowers are locked in place pretty firmly. The data shows that 19.5% of outstanding mortgages have rates below 3%, which really highlights how extraordinary those 2020 and 2021 conditions were. Rates below 3% had never happened before in the historical record going back to 1971, and they mostly stayed there only through September 2021.
What's genuinely fascinating is how the age of these mortgages is shifting. The oldest cohort of these Covid-era refinances is now 5 to 7 years old, and they represent the highest share in recorded history at 41.2% of all outstanding mortgages. This is completely flipping the usual pattern where mortgages less than four years old used to dominate the market. The research shows that the share of mortgages under four years old has collapsed from about six in ten back in 2023 to less than three in ten now. Fewer transactions during high-rate years combined with that aging Covid cohort means the market has become much more static.
The affordability picture is getting tougher, especially for new buyers entering the market. According to the research, the average monthly mortgage payment nationwide is now about 2,023 dollars and continues climbing. In the Western regions, payments are running nearly 2,400 dollars monthly, roughly 6% higher than the year before. But here's the real story: that 2,023 dollar average includes all those locked-in borrowers with sub-4% rates. New buyers coming into today's market are facing substantially higher payments than that average suggests, which is exactly why so many potential sellers won't move. It's a catch-22 where higher rates keep locked-in homeowners in place, preventing supply from coming to market.
What I'm seeing locally here in the Bay Area and throughout the East Bay is a market that's shifting gradually but remains fundamentally constrained by rate lock-in. We're getting some relief with falling home prices and rising active listings, which is creating more hospitable conditions than we've had in years past. But until mortgage rates drop enough to motivate that massive Covid cohort to consider moving or new construction to ramp up significantly, we're going to keep seeing this bottleneck. For my buyers, especially first-time homebuyers and those upgrading, the challenge remains getting comfortable with higher payments while competing in a supply-constrained market. For sellers, those who do move now are finding less competition but also less buyer enthusiasm at higher price points.
