More than 80% of existing mortgages have a rate of 6% or lower, meaning as rates approach similar levels, more homeowners will be brought back to the market. This especially is true in metros with high mortgage usage. 

"Falling mortgage rates open doors for many would-be buyers and sellers, but where you live determines how much the market shifts in response to the opportunity," said Danielle Hale, chief economist at Realtor.com, in a press release. 

Washington, D.C., Denver, Virginia Beach, Virginia and Raleigh, North Carolina lead the country with the largest share of mortgaged households, all above 70%, and thus are more likely to see an increase in buyer demand as rates continue to fall, the report showed.

Meanwhile, Miami, Pittsburgh and Buffalo, New York rank among the least mortgage-reliant metros, all below 45%, meaning their housing markets won't respond as dramatically to improved financing conditions.

"In markets like Denver or Washington, D.C., where most owners are still paying off their mortgages, lower rates are more likely to spark renewed activity," Hale said. "Meanwhile, metros with older populations and more outright owners, like Buffalo or Miami, may see a lower market-level response, even though lower rates are a difference-maker for some individuals in these markets."

Roughly 64% of occupied housing units in the United States are owned, and nearly two-thirds of those homeowners have a mortgage, Realtor.com said. 

The age of homeowners largely drives mortgage activity nationwide. In 2024, 53.9% of homeowners were 65 or older, similar to years past. Because most people buy houses earlier in life, rising property value allows them to build equity over time and either refinance or sell and downsize, reducing new mortgage debt, the report said.

D.C. (74.3%), Maryland (70.0%) and Colorado (69.0%) hold the highest share of mortgaged households at the state level, while West Virginia (55.1%), Mississippi (51.6%) and New Mexico (50.6%) have more outright owners. The Northeast and West regions will be most affected by declining rates, whereas most of the South fall below a 60% share.