Mortgage rate lock-in prevented an estimated 1.72 million home sales between mid-2022 and mid-2024, according to the Federal Housing Finance Agency. That is 1.72 million households that would have sold and, in many cases, moved, but stayed put because giving up a 3% mortgage for a 7% one made no financial sense. In 2026 the lock-in effect is loosening, slowly, as more homeowners carry higher-rate loans. But with the 30-year fixed rate back above 7% in September, it is still one of the biggest reasons Americans are moving less than they used to. This report pulls together FHFA, Freddie Mac, NAR, Redfin and Census data to show how lock-in is reshaping moving in 2026.
Quick answer: About half of U.S. mortgages still carry a rate below 4%, while new loans cost around 7%. That gap keeps many owners from selling. FHFA research found each percentage point of rate gap cuts the odds of a sale by 18.1%. Lock-in is easing as the share of loans above 6% climbs past 22%, but it still suppresses moves in 2026.
What Is the Mortgage Rate Lock-In Effect?
The lock-in effect happens when homeowners hold fixed-rate mortgages well below current market rates. Selling means paying off the cheap loan and taking out a new, more expensive one to buy the next home, so many owners simply don’t sell. FHFA economists define the gap as the “rate delta”: the difference between a borrower’s existing rate and the market rate for a similar new loan. In the second quarter of 2024, the average outstanding loan carried a rate 2.54 percentage points below the current market rate, per FHFA’s analysis.
The effect on behavior is large. The FHFA’s Working Paper 24-03, “The Lock-In Effect of Rising Mortgage Rates”, found that for every percentage point by which market rates exceed a borrower’s origination rate, the probability of a sale falls by 18.1%. The authors estimated that lock-in produced a 57% reduction in sales of homes with fixed-rate mortgages in the fourth quarter of 2023, and prevented 1.33 million sales between the second quarter of 2022 and the end of 2023. A later update extended the estimate to 1.72 million prevented sales through the second quarter of 2024.
Lock-in also pushed prices up. Because fewer owners listed their homes, the supply shortage raised home prices by an estimated 5.7%, more than offsetting the 3.3% downward pressure from higher rates themselves, according to the FHFA working paper. The updated estimate puts the price effect at 7.0%.
How Many Homeowners Are Still Locked In?
The share of borrowers with very low rates has been falling since 2022 as people move, refinance or pay off loans, and as new, higher-rate mortgages replace old ones. The table below shows the distribution of outstanding mortgage rates as of the third quarter of 2025, from Redfin’s analysis of FHFA National Mortgage Database data.
| Rate on Outstanding Mortgage | Share of Mortgaged Homeowners, Q3 2025 |
| Below 3% | 20.0% |
| 3.00% to 3.99% | 31.5% |
| 4.00% to 4.99% | 17.1% |
| 5.00% to 5.99% | 10.2% |
| 6.00% or higher | 21.2% |
Newer data shows the trend continuing. In the first quarter of 2026, 22.1% of outstanding mortgages carried a rate above 6%, up from a low of 7.3% in the second quarter of 2022, according to a Calculated Risk summary of the FHFA National Mortgage Database aggregate statistics. Loans below 4% fell to 49.9% of the total, down from a peak of 65.1% in early 2022, and 66.7% of loans were still below 5%.
The direction matters as much as the level. Every quarter, a larger slice of homeowners holds a loan taken out at 6% or more, whether because they bought recently or because they moved despite the rate gap. Those owners have little reason to stay put for financing reasons alone, and as their share grows, the pool of locked-in sellers shrinks.
Put simply, roughly half of all mortgaged homeowners still have a rate under 4%. For them, moving means a substantial jump in monthly housing costs, even before accounting for higher home prices.
What the Rate Gap Costs a Homeowner Who Moves
To show why lock-in is so powerful, here is an illustrative calculation of monthly principal and interest on a $400,000, 30-year fixed-rate loan at different rates. The figures use the standard amortization formula and exclude taxes and insurance. The 7.03% rate is the national average for the week of September 24, 2026, from Freddie Mac’s Primary Mortgage Market Survey.
| Mortgage Rate | Monthly Principal and Interest ($400,000 loan) | Extra Cost per Month vs. 7.03% |
| 3.00% | $1,686 | $983 less |
| 4.00% | $1,910 | $759 less |
| 5.00% | $2,147 | $522 less |
| 6.00% | $2,398 | $271 less |
| 7.03% (Sept. 24, 2026 average) | $2,669 | – |
A homeowner with a 3% loan who sells and borrows the same amount at today’s rate would pay nearly $1,000 more per month, or close to $11,800 a year, for the same size loan. That is before any increase in home price. It is easy to see why many owners with pandemic-era loans choose to stay, renovate, or rent out their home rather than sell.
Rates have not moved in a straight line in 2026. Redfin reported the weekly average at 5.98% in late February 2026, well below the two-decade high of 7.79% in October 2023. By September 24, the 30-year average had climbed back to 7.03%, up from 6.30% a year earlier, per Freddie Mac. That rebound has re-widened the rate gap for millions of owners who were starting to consider a move.
How Lock-In Is Changing Moving in 2026
Home sales are stuck near 30-year lows
Existing-home sales totaled 4.06 million in 2025, essentially flat from 2024 and at the lowest level since 1995, according to National Association of Realtors data reported by PBS NewsHour and the Associated Press. In August 2026, sales ran at a seasonally adjusted annual pace of 3.98 million, down 1.2% from a year earlier, per NAR’s August 2026 existing-home sales report. NAR’s chief economist tied the dip directly to high mortgage rates.
Fewer Americans are moving at all
The share of Americans who moved in the past year fell to 11.8% in 2024 from 12.1% in 2023, and just 2.1% moved from a different state, according to the Census Bureau’s American Community Survey mobility estimates. Lock-in is not the only reason, but a homeowner who does not sell usually does not move.
Owners are staying longer than ever
The typical home seller had lived in their home for 11 years before selling, an all-time high, according to NAR’s 2025 Profile of Home Buyers and Sellers. The same report found first-time buyers made up just 21% of purchases, the lowest share since NAR began tracking in 1981, and their median age rose to a record 40. Fewer listings from existing owners means fewer starter homes coming open.
Staying put to keep a low rate is a common reason not to move
About 16% of U.S. homeowners say they are staying in their current home specifically because they want to keep their low mortgage rate, the fifth most-cited reason for not relocating, according to Redfin.
Lower-wealth households feel it most
The FHFA authors also concluded that lock-in restricts residential mobility more broadly, changes what kinds of homes people choose, and worsens affordability, with particularly negative consequences for borrower groups that have accumulated less wealth, according to the working paper. A homeowner with substantial equity can absorb a higher rate on a smaller loan. A household with little equity cannot, so it is more likely to stay where it is, even when a job or family need points elsewhere.
The markets most affected are the most expensive ones
FHFA’s geographic analysis of lock-in found the widest rate gaps in the San Jose (-3.01 points), San Francisco (-2.93), Oxnard-Thousand Oaks-Ventura (-2.93) and San Diego (-2.91) metros. The largest estimated numbers of lost sales were in the New York (-67,160) and Los Angeles (-63,440) metros. These high-cost coastal areas are also the biggest sources of interstate out-migration, which means lock-in is likely holding back some of the moves that would otherwise flow to lower-cost states.
Signs the Lock-In Effect Is Easing
Lock-in is not permanent. Several indicators suggest it is gradually loosening, even with rates near 7%.
- More owners already have high rates. The share of mortgages above 6% has tripled from 7.3% in mid-2022 to 22.1% in early 2026, per FHFA National Mortgage Database figures summarized by Calculated Risk. These owners face little or no penalty for moving.
- Inventory is rising. Total housing inventory reached 1.62 million units in August 2026, up 5.9% from a year earlier and above 1.6 million for the first time since November 2019, according to NAR. Months of supply rose to 4.9, and first-time buyers made up 30% of August sales, up from 29% in July.
- New listings are up. Redfin’s August 2026 market report found U.S. new listings hit their highest level since 2022, suggesting more owners are deciding life changes matter more than their rate.
- Life events still force moves. Job changes, family needs, divorce and retirement don’t wait for rates. Among interstate movers, being closer to family (29%), a new job or transfer (26%) and retirement (14%) were the top reasons in United Van Lines’ 2025 National Movers Study.
What Lock-In Means If You’re Planning a Move
- Run the real numbers. Compare your current payment with the payment on your next home at today’s rate, not the rate you hope for. The gap is often smaller if you are moving to a lower-cost area.
- Consider keeping the house. Some owners with very low rates rent out their current home instead of selling. That can work, but factor in landlord costs, vacancy and the tax implications before deciding.
- Use the inventory shift. With more homes on the market and months of supply near 5, buyers in many areas have more negotiating room than they did in 2022 and 2023.
- Keep moving costs predictable. When your housing payment is going up, a surprise on the moving bill hurts more. A binding written estimate locks in the price of the move itself.
Frequently Asked Questions
What is the mortgage rate lock-in effect?
It is the tendency of homeowners with low fixed-rate mortgages to avoid selling because a new loan would cost much more. FHFA research found each percentage point that market rates exceed a borrower’s rate reduces the probability of selling by 18.1%.
How many home sales has the lock-in effect prevented?
FHFA estimated that lock-in prevented 1.33 million home sales from the second quarter of 2022 through the end of 2023, and 1.72 million through the second quarter of 2024. It also raised home prices by an estimated 7.0%.
What share of homeowners have a mortgage rate below 4%?
About half. FHFA National Mortgage Database figures show 49.9% of outstanding mortgages were below 4% in the first quarter of 2026, down from 65.1% in early 2022.
Is the lock-in effect ending in 2026?
It is easing but not ending. The share of loans above 6% reached 22.1% in early 2026 and inventory is at its highest since 2019. But with the 30-year rate at 7.03% in late September 2026, most owners with sub-4% loans still face a large payment jump if they move.
Which areas are most locked in?
FHFA’s analysis found the widest gaps between existing and market rates in San Jose, San Francisco, Oxnard-Thousand Oaks-Ventura and San Diego, and the largest estimated lost sales in the New York and Los Angeles metros.
Does the lock-in effect affect renters?
Indirectly. Renters are not locked in by a mortgage, but fewer owners selling means fewer homes for sale, which has helped push first-time buyers down to a record-low 21% of purchases, according to NAR.
Next Step: Price Your Move Before You Decide
If you are weighing whether to give up a low rate for a move, the cost of the move itself belongs in the same spreadsheet as your new mortgage payment. Get at least three written estimates based on a video or in-home survey, and ask for a binding or binding-not-to-exceed quote so the number you plan around is the number you pay. Interstate Moving and Relocation Group can provide a written estimate for a long-distance move based on your actual inventory and route, so you can make the stay-or-go decision with real numbers.
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