If you’re like many homeowners, you’ve probably had the same thought: “I want to move… but I don’t want to lose my 3% rate.” It makes sense. That rate has been one of your biggest financial wins. But here’s the reality:
A great rate can’t fix a home that no longer fits your life.
Over time, needs change. Jobs shift. Families grow. Lifestyles evolve. And you’re not the only one realizing that staying put just for the rate may no longer be worth it.
The Lock-In Effect Is Finally Loosening
For the past few years, a lot of homeowners stayed frozen in place thanks to what experts call the lock-in effect. It happens when people delay moving simply because they don’t want a higher rate on their next mortgage.
But new data from Federal Housing Finance Agency (FHFA) shows that grip is starting to ease.
The share of homeowners with a mortgage rate below 3 percent (the yellow in the graph below) has been inching down as more people decide to sell and relocate. At the same time, the number of homeowners with rates above 6% (the blue) is growing, meaning more buyers are taking on today’s rates for the home they truly want.
It may look like a small shift, but it’s a meaningful one. In fact, the share of mortgages with rates over 6 percent just reached 10-year high. (see graph below).
That’s a clear sign more people are adjusting to today’s market instead of waiting for the “perfect” rate.
Why More Homeowners Are Moving Even if It Means a Higher Rate
It usually comes down to one thing: they can’t keep putting life on hold.
Maybe the house feels too small. Maybe it’s too big. Maybe it’s too far from work, too far from family, or no longer matches the way you live. As Chen Zhao, Head of Economic Research at Redfin, puts it:
“More homeowners are deciding it’s worth moving even if it means giving up a lower mortgage rate. Life doesn’t standstill—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.”
First American refers to these life motivators as the 5 Ds:
- Diplomas: People with college degrees typically earn more, and that adds up to more buying power. Maybe you bought your house when you were younger and now that you’ve graduated and have a rising career, you’re ready to move up.
- Diapers: You’ve outgrown your space. If you’re welcoming a new baby, your current home might not be cutting it anymore.
- Divorce: Whether it’s ending a marriage (or starting one), it can create the need for a new place to call home.
- Downsizing: You’re ready to downsize. Maybe the kids have moved out and it’s time to simplify. Smaller house, less maintenance, more freedom.
- Death: If you’ve recently lost a loved one, maybe you’ve realized you want to be closer to family. Life’s too short to live far from the people who matter most.
No matter what your “D” is, the question becomes less about your mortgage rate and more about how long your current home can realistically support the life you’re living today.
Many Sellers Have Put Their Plans on Hold for Too Long
According to Realtor.com, nearly two out of three potential sellers have been thinking about moving for more than a year. That’s twelve months of delaying plans, comfort, lifestyle upgrades, and personal goals.
So instead of asking, “Should I move?” the real question may be:
“How much longer am I willing to stay in a home that no longer fits my life?”
And with mortgage rates already off their peak and forecasted to dip a bit more in 2026, the window for making a move may feel more doable than it did even a few months ago.
Bottom Line
Life doesn’t wait for the perfect rate. And maybe you don’t need to either.
If you’re thinking about making a change in the coming months, and you want a clear picture of what the numbers actually look like for you here on Maui, let’s talk.
