The lock-in effect: Why some homeowners just aren’t moving

It’s every homeowner’s dream: a rock-bottom mortgage rate. Lower rates make monthly payments more affordable, potentially freeing up the budget for other expenses or financial goals.

At the same time, having a lower rate can bring some unexpected challenges – particularly when mortgage rates are higher than they’ve been in years. Reluctance to let go of that rock-bottom mortgage rate might keep homeowners from moving forward in their lives.

Some call this dilemma the “lock-in effect” – when selling your home would mean walking away from such a low monthly payment that it feels foolish to do so. Historically low mortgage rates become the “golden handcuffs” that make homeowners stay put, even when moving would be beneficial.

This conflict applies to a sizable group of American homeowners today, according to a recent survey from Rocket Mortgage. More than 600 homeowners surveyed have mortgage rates under 4%, and many feel locked in by mortgage rates that are well below current market levels. This has tightened the already limited inventory on the housing market, resulting in elevated home prices.

The good news: Some respondents to the Rocket Mortgage survey report that there are keys to unlock their golden handcuffs – circumstances that would influence them to walk away from low rates and move to a new home.

Key takeaways:

• Almost one-third (29%) of homeowners with a mortgage rate under 4% say their current home is their “forever home” – the largest share of respondents. Another 16% don’t plan to move within the next decade.
• About 29% of homeowners with low interest rates say upgrading to a newer, larger home or one in a better location would be their primary reason to move.
• About one-third (32%) of homeowners with a historically low rate say another significant drop in mortgage rates would motivate them to move. This outranked a significant drop in home prices (18%) and a major life change, like divorce or job relocation (19%), as the most common response.
• But one-fifth (20%) of respondents say nothing could make them give up their current interest rate.

Homeowners with sub-4% mortgage rates are staying put

Just over half (53%) of mortgaged homeowners have a rate below 4% – down from 65% in 2022, according to Redfin. About 20% of homeowners are still holding unicorn rates under 3%, though that figure is also down from 25% in 2021.

For homeowners in these situations, staying put offers significant savings. A difference of even 1 percentage point can substantially change your monthly payment and the total amount of interest you’ll end up paying for your mortgage.

Factor in recent data from Harvard University’s Joint Center For Housing Studies showing home prices in large markets surged anywhere from 24% – 79% between 2019 and 2024, and it’s easy to see why many homeowners feel locked in their current homes.

How did we get here?

When the world shut down in 2020 and 2021 due to the COVID-19 pandemic, the Federal Reserve slashed benchmark interest rates to near zero and engaged in massive purchases of agency mortgage-backed securities. This pushed the average 30-year fixed rate to an all-time low of 2.65% in January 2021.

This development triggered a massive wave of refinancing. According to the Federal Reserve Bank of New York, approximately 14 million mortgages were refinanced between the second quarter of 2020 and the end of 2021. About 64% of those households opted for rate-and-term refinances, lowering their monthly payments by an average of $220.

When the world opened up again in 2022, inflation ballooned and mortgage rates began to rise, eventually reaching 7% or more. The good news? Homeowners who purchased or refinanced during the pandemic were spared these higher rates. The bad news: Because newer rates were so high, homeowners with the historically low rates were effectively stuck.

Data from the recent Rocket Mortgage survey provides some color. Among respondents who report having a mortgage rate of 3.99% or lower, almost one-third (29%) say they are planning to stay in their current home forever, and another 16% say they won’t move in the next decade.

In other words, nearly half (46%) of respondents say they’re sticking with their current homes for the next decade or longer.

“Movin’ on up” is the top reason to leave

Just because many homeowners find themselves in golden handcuffs doesn’t mean they aren’t thinking about moving.

In the Rocket Mortgage survey, 29% of respondents with a mortgage rate under 4% say they would consider moving if they could upgrade to a newer, larger, or better-located home. An additional 18% of respondents say they would move for job relocation or better career opportunities, and 17% report they would move to be closer to family and friends. About 16% say they’d think about buying a new home if it meant reducing their overall cost of living.

Still, almost one-fifth (17%) of respondents say they wouldn’t consider moving for any reason – reinforcing how a significant portion of American homeowners remain committed to their current mortgage rate.

Some homeowners say they’ll never move

As of May 2026, the average 30-year fixed mortgage rate is over 6%, according to the Federal Reserve Bank of St. Louis. Lower mortgage rates would no doubt make some homeowners feel more open to buying a new home.

Indeed, according to the Rocket Mortgage survey, 32% of homeowners with an interest rate below 4% say they would sell their home and purchase a new one if current mortgage rates fell significantly. Another 19% of respondents say they would sell their current home if they experienced a major life change – such as marriage or divorce, a change in family needs, or a change in job status – while 18% say they would sell their home if there was a significant drop in home prices in their preferred area.

While these scenarios are compelling, it’s worth noting that one-fifth (20%) of respondents say that nothing could get them to give up their historically low interest rate. For these individuals, it seems the golden handcuffs are an especially heavy deterrent to buying a new home – at least for now.

The bottom line: The lock-in effect is real – but not unbreakable

More than 5 years removed from the start of the COVID-19 pandemic, many Americans still wear golden handcuffs when it comes to their historically low mortgage rates. These homeowners hesitate to sell their homes because they don't want to trade a sub-4% interest rate for a much higher rate, which has had a chilling effect on the overall housing market.

Looking ahead, though, a thaw could be on the horizon. Some homeowners who have refused to budge from their rock-bottom mortgage rates are facing life changes such as marriages, divorces, growing families, and career milestones – events that may necessitate a different home. Over time, the golden handcuffs may loosen considerably – and in the real estate market, greater flexibility is always a win.

Methodology

In March 2026, Rocket Mortgage conducted an online survey of 2,004 American homeowners, age 18 and older, to determine what motivates homeowners to move when they have low mortgage interest rates. Those who answered that their interest rate was 4% or higher, or that they don’t have a mortgage, were disqualified. In total, 616 respondents remained. Not every respondent answered every question. All questions were multiple choice.

Refinancing may increase finance charges over the life of the loan.

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