More homeowners are parting ways with their 3% mortgage rates, embracing higher rates for better homes. The lock-in effect, where low-rate homeowners refused to sell, is fading. The shift has led to increased housing inventory and may ease affordability challenges. Rates have climbed from pandemic lows, with 6% mortgages becoming more common. Homeowners are bidding farewell to their 3% mortgage rates, with California, Hawaii, and Utah leading the way. In California, the average home value sits at $754,000, while the state’s Proposition 13 rule keeps property taxes low despite rising home values, creating a second lock-in effect for homeowners.

On the flip side, Mississippi, Oklahoma, and West Virginia see a higher willingness to take on 6% mortgages due to lower home values. Home-insurance costs in Mississippi are expected to rise by 8% to $5,200, mainly due to hurricane risks in coastal counties.

Over 40% of U.S. homes are mortgage-free, freeing homeowners from the lock-in effect. This trend has been on the rise, with 33% of homes being owned outright in 2010. For these homeowners, not having a mortgage allows them more flexibility in selling their homes.

Read more at MarketWatch: For the first time in years, more homeowners have a 6% mortgage rate than a 3% one. That’s great news for frustrated buyers.