FHFA’s Q4 National Mortgage Database: Outstanding Mortgage Rates, LTV and Credit Scores

Key Takeaways

• Under‑4% loans dropped to 50.6% Q4 2025
• Over‑6% loans rose to 21.9% Q4 2025
• Low‑rate lock‑in hampers home‑owner mobility
• Rising rates likely boost housing inventory
• Credit scores remain steady despite rate shifts

Summary

The FHFA’s Q4 2025 National Mortgage Database shows a sharp shift in mortgage rate distribution. Loans under 4 % fell from a 65.1 % peak in Q1 2022 to 50.6 % today, while loans above 6 % rose from 7.3 % to 21.9 % over the same period. Average rates have climbed, eroding the low‑rate lock‑in that previously suppressed home‑owner mobility. Credit scores and loan‑to‑value ratios remain stable, but the changing rate mix signals a turning point for the housing market.

Pulse Analysis

The latest FHFA data paints a clear picture of a mortgage market in transition. After pandemic‑driven rate cuts pushed a majority of mortgages below 4 %, the Federal Reserve’s tightening cycle has pushed rates upward, lifting the share of loans above 6 % to nearly 22 % by the end of 2025. This reversal not only reflects broader monetary policy but also signals that the era of ultra‑low‑rate lock‑in—where homeowners were reluctant to sell due to payment shock—is waning, setting the stage for increased market fluidity.

For homeowners, the shift carries both risk and opportunity. Those locked into sub‑4 % loans still enjoy low payments, but as refinancing becomes less attractive, many may consider selling to capitalize on home‑equity gains before rates climb further. Prospective buyers, meanwhile, face higher borrowing costs, which could temper demand and pressure price growth. Lenders report that credit scores have held steady, suggesting borrower fundamentals remain solid even as rate sensitivity rises.

Investors and policymakers should watch these trends closely. A rising share of higher‑rate mortgages can boost mortgage‑backed‑securities yields, influencing portfolio allocations. At the same time, increased homeowner turnover may alleviate the chronic inventory shortage that has plagued many markets since 2020. As rates stabilize, the industry can expect a more balanced environment where refinancing activity moderates and new construction gains traction, supporting a healthier housing cycle.