(NewsNation) — Nearly 40% of homeowners say they couldn’t afford to buy their home today as mortgage rates surge and prices hit all-time highs, according to a new Redfin report.

The recent survey of 1,988 homeowners underscores the extent of the “lock-in effect” — where people with low mortgage rates are unwilling to sell because they won’t find a better deal. It’s a dynamic that’s been made worse by elevated interest rates, which has exacerbated the country’s housing shortage and pushed up prices.

By the end of 2023, about 70% of all mortgage holders had rates more than 3 percentage points below what the market would offer them if they tried to take out a new loan, according to an analysis by The New York Times.

From 1998 to 2020, there was never a time when more than 40% of Americans with mortgages had locked-in rates more than 1 percentage point below market conditions, The Times said.

Another recent report from economists at the Federal Housing Agency found that the lock-in effect is responsible for about 1.3 million fewer home sales in the U.S. between the spring of 2022 and the end of 2023.

Baby boomers have been especially reluctant to move and nearly half (45%) don’t think they could afford a similar home in their neighborhood now, Redfin found.

“That stands to reason, as baby boomers are more likely to have bought their home a long time ago for a much lower price,” the real estate company noted in its report.

Today, empty-nest baby boomers own twice as many large homes as millennials with kids, according to a separate Redfin analysis. With higher mortgage rates and no incentive to sell, that’s unlikely to change anytime soon.

“Americans who already own homes benefit from rising values and they can consider themselves lucky they broke into the housing market while they could still afford it,” Redfin senior economist Elijah de la Campa said in a statement. “On the other hand, price appreciation makes the prospect of buying a new home daunting or even impossible for many people who want to move.”

This week, the average long-term U.S. mortgage rate climbed to its highest level since late November during what’s traditionally the housing market’s busiest time of the year.

The average rate on a 30-year mortgage is now at 7.17%, according to mortgage buyer Freddie Mac. Three years ago, that same rate was under 3%.

Dismal market conditions have now made renting more affordable than buying in all of America’s largest metropolitan areas.

Housing experts expect mortgage rates to go down throughout the year, although the outlook has become more pessimistic recently. Fannie Mae predicts the 30-year fixed mortgage rate will end 2024 at 6.4%, up from its 5.9% forecast earlier in the year.

“Interest rates existing in a ‘higher for longer’ state seems to be an increasingly real possibility in the eyes of market participants, as well as some homebuyers and sellers,” Hamilton Fout, Fannie Mae vice president, economic and strategic research, said in a statement.