(NewsNation) — Homeowners have been reluctant to sell due to elevated mortgage rates, but a new report shows the so-called “lock-in effect” is starting to ease.

In the first quarter of this year, 6 in every 7 homeowners, 86%, had a mortgage rate below 6%, according to a Redfin analysis of data from the Federal Housing Finance Agency’s National Mortgage Database. That’s down from a record high of 93% in mid-2022.

That may be good news for potential homebuyers, who have been left with few options, in part because homeowners haven’t wanted to sell and give up their low mortgage rates.

The decision to stay put instead of buying another home at a higher rate is known as the “lock-in effect,” which has contributed to the nation’s housing shortage.

The problem was brought on during the pandemic when the average 30-year fixed rate sank to a record low of 2.65%. Since then, mortgage rates have more than doubled with the Federal Reserve’s interest rate hikes.

Earlier this year, a report from economists at the Federal Housing Agency found that the lock-in effect caused about 1.3 million fewer home sales in the U.S. between the spring of 2022 and the end of 2023.

Now, some homeowners are giving up their lower rates and moving, even with average mortgage rates at 6.46%. That’s true across the mortgage rate spectrum, Redfin found.

The share of homeowners with certain mortgage rates:

• Below 6%
  • Q2 2022: 92.8%
  • Q1 2024: 85.7%
• Below 5%
  • Q2 2022: 85.6%
  • Q1 2024: 76.1%
• Below 4%
  • Q2 2022: 65.3%
  • Q1 2024: 57.4%
• Below 3%
  • Q2 2022: 24.7%
  • Q1 2024: 22%

Part of the reason the share of locked-in homeowners has dipped is because everyone who bought a home in the last year was entering the market when rates were above 6%, the report noted.

The current average weekly mortgage rate (6.46%) is the lowest in 15 months, but rates likely need to drop further for the lock-in effect to loosen its grip in a major way.

“I have a dozen or so homeowners who would like to sell but aren’t willing to give up their 3% interest rate for one that’s more than twice as high,” Blakely Minton, a Redfin Premier real estate agent in Philadelphia, said in the report. “Many of those sellers will list if rates get back down to 5%.”

New listings were at the lowest level in a year last month, per Redfin. The shortage of homes for sale has helped drive prices to all-time highs.

A June Bankrate survey found that nearly half of homeowners would need mortgage rates to fall below 5% to feel comfortable buying a home this year. And just 2% of homeowners said they would be comfortable purchasing a home this year at a mortgage rate of 6% or higher.

Federal Reserve policymakers are expected to slash interest rates at their September meeting, which could lead to lower mortgage rates. However, don’t expect them to return to historic lows any time soon.

“Lower doesn’t mean we’re going back to 3% mortgage rates,” Bankrate’s chief financial analyst, Greg McBride, said. “The best we may be able to hope for over the next year is 5.5 to 6%.”