Americans are moving despite higher rates, as the lock-in effect starts to fade, according to Redfin
The era of “golden handcuffs” in the US mortgage market—where homeowners clung to ultra-low pandemic-era rates—showed signs of loosening in the second quarter of 2025, as more Americans accepted today’s higher mortgage rates and made moves they had long deferred.
According to a new Redfin analysis of the Federal Housing Finance Agency’s National Mortgage Database, the share of mortgaged homeowners with rates at or above 6% rose to 19.7% in Q2, the highest level since 2015.
Meanwhile, just over half of mortgaged homeowners (52.5%) now hold rates below 4%, down from nearly two-thirds in early 2022.
“More homeowners are deciding it’s worth moving even if it means giving up a lower mortgage rate,” Chen Zhao, Redfin’s head of economics research, said.
“Life doesn’t stand still—people get new jobs, grow their families, downsize after retirement, or simply want to live in a different neighborhood. Those needs are starting to outweigh the financial benefit of clinging to a rock-bottom mortgage rate. As a result, more homes are hitting the market than we’ve seen in years, giving buyers a wider range of choices.”
Lower mortgage rates could finally loosen the golden handcuffs holding homeowners back—says Brian Mozley, Chief Growth Officer at Choice Mortgage Group.https://t.co/r8aIpbxM39
— Mortgage Professional America Magazine (@MPAMagazineUS) September 23, 2025
Mortgage rates hovered between 6% and 7% for most of 2025, with the weekly average reaching 6.38% by late September. Redfin economists expect rates to remain in this range over the next year, even as the Federal Reserve’s recent rate cut offered a brief reprieve.
The “lock-in effect,” which saw homeowners staying put to avoid trading up to higher rates, has eased slightly as the share of sub-3% mortgages dropped to 20.4%, the lowest since 2021. The share of mortgages below 6% fell to 80.3%, down from 92.7% three years ago.
“Rates have not gone down significantly enough to move the needle—prospective buyers need to see a bigger difference in their potential monthly payment before things are going to change,” Mariah O’Keefe, a Redfin Premier agent in Seattle, said.
“If rates tick down below 6%, that will bring a lot of people back into the market.”
The National Association of Realtors said that if mortgage rates dropped to 6%, about 5.5 million more US households could afford to buy a home. HomeAbroad estimated buyers would save around $57 each month—or $685 a year—if rates reached that level.
Fannie Mae’s Economic and Strategic Research Group predicted that 30-year mortgage rates will fall to 6.4% by the end of 2025 and drop further to 5.9% by late 2026.
However, after weeks of falling, US mortgage rates ticked up for the first time since July.
Freddie Mac reported the average 30-year fixed rate rose to 6.3% for the week ending September 25, up from 6.26% the previous week. The 15-year rate also climbed to 5.49% from 5.41%.
The shift comes after a historic refinancing boom during the pandemic, when at least one-third of mortgages were refinanced and existing home sales soared to decade highs. The resulting lock-in effect suppressed inventory and stifled mobility.
Now, with more homeowners compelled by life events—job changes, family needs, or downsizing—inventory has begun to recover in many markets, though sales volumes remain subdued as buyers wait for more favorable rates.
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