flexiblefullpage - default
Currently Reading

Why the ‘Lock-in’ Effect Is Prompting Homeowners to Stay Put

billboard - default

Why the ‘Lock-in’ Effect Is Prompting Homeowners to Stay Put

New listings are falling across the U.S. as homeowners refuse to sacrifice their low interest rates for new homes with more expensive housing costs

September 20, 2022
Small white house with stacks of coins, a calculator, and a pencil
Image: Stock.adobe.com

Nearly six out of every seven U.S. homeowners have locked in mortgage interest rates well below today’s 6% level, and that share is contributing to a scarcity of new listings, Redfin reports. Homeowners across the country are becoming increasingly hesitant to list their homes if it means giving up their low mortgage rates and taking on a more costly monthly housing bill. 

During the four weeks ending September 11, new listings fell 19% year-over-year, the largest drop recorded since May 2020. Even as the housing market slows, a lack of new inventory is sustaining elevated home prices and leaving would-be buyers with few affordable options.

The high share of homeowners who feel locked into their low mortgage rate is contributing to a steep decline in the number of homes hitting the market. New listings slumped 19% year over year during the four weeks ending Sept. 11, the largest drop since May 2020. 

This “lock-in” effect is manifesting in markets across the country. For example, Redfin found that in Atlanta, Chicago, Los Angeles and Washington, D.C., homeowners with a mortgage rate below 3.5% were 7.6% less likely to put their homes up for sale in August than homeowners with a rate above 3.5%.

Read more

Related Stories


As Mortgage Rates Surge to 7%, Buyers Face Shrinking Window of Opportunity

Housing affordability recently took another hit as the 30-year fixed mortgage rate reached 7%, and a growing number of prospective buyers are struggling to stay in the game


How One Fintech Entrepreneur Is Working to Make Solar Affordable for Every Household

With the help of his solar loan fintech company, GoodLeap, Hayes Barnard is hoping to finance solar installations for a growing number of households across the U.S.

Housing Policy + Finance

Moody's Analytics: 210 Regional Housing Markets Were Overvalued by More Than 25% in the 2nd Quarter of 2022

A housing correction looms, with some markets seeing housing activity slowing and home prices falling

boombox1 -
native1 - default
halfpage2 -

More in Category

native2 - default
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.