The rate lock-in effect has been a concern on the minds of many in real estate over recent years as mortgage rates have mostly stayed in the 6%-7% range. Homeowners with rates in the 2%-3% range, while they could potentially afford the price of a new home in selling their current one, have reportedly felt locked-in by their mortgage rate in fear of facing higher interest.
Looking at the data, a study from Realtor.com® claimed that homeowners looking to sell and move could face up to a 73.2% increase in mortgage payments, as payments could jump from the typical $1,300 in principal and interest a month (for those with a rate under 4.5%) to nearly $2,236 (for the 6% range).
As the rate lock-in effect persists into 2026, with mortgage rates now on the rise once again due to the U.S.’s current conflict with Iran, the question is how deep does this effect truly run? Beyond the ever-present necessities of moving for families or jobs, are homeowners still able to do the age-old move up and upsize into larger homes?
For economists, the short answer is yes. Rate lock-in has definitely held some buyers back, but the upsizing buyer has tended to persist in the market.
“It’s sort of surprising maybe even, that we have as many sales as we do, and it is entirely the move-up buyer that’s driving that, because they’re able to basically convert equity that they’ve gained in their existing home and (are) almost in essence kind of buying down the higher mortgage rates,” Bright MLS Chief Economist Lisa Sturtevant says.
As Realtor.com Senior Economic Research Analyst Hannah Jones puts it, upsizing remains a “meaningful motivator for sellers despite years of market headwinds.”
Jones cites data from Realtor.com’s 2025 Sellers Survey last spring, which found that 34% of homeowners planning to sell in the next 12 months cited needing more space as a reason. This was up from 23.4% in the 2024 spring survey, an uptick which Jones says “likely reflects a few converging trends.”
Sturtevant agrees with Jones’ take, adding that “the upside has been pretty resilient because many people who own a home have a tremendous amount of equity that they’ve built up in that home.”
Sturtevant explains that even when mortgage rates neared 8%, “higher rates weren’t keeping them from buying,” as they’ve been in the “best position in the whole market over the last few years.”
Coupled with home equity gains that Sturtevant mentioned, which have given buyers looking to upsize greater affordability in the market, Jones adds that some families who were more locked-in “are beginning to prioritize space needs over rate preservation.”
“Life doesn’t pause for the housing market,” she continues. “Growing families, aging parents moving in and remote work arrangements are all pressures that could eventually override financial inertia.”
For agents, however, the answer is more nuanced. While data from economists does show that upsizing remains a market segment, Paul Cervone—a Realtor® with Lamacchia Realty, Inc. in Massachusetts—says that rate lock-in does remain the “single biggest inhibitor” to more activity.
Cervone says that the aforementioned jump in payments for the lower mortgage rate holders creates a “powerful disincentive to trade up,” and “reinforces the ‘stay put’ mindset.”
“As a result, mobility is down and the traditional ‘housing ladder’ is partially frozen, limiting both listings and move-up transactions,” he continues.
This is something Jones agrees with, noting that “with overall transaction volume still well below historical norms, upsizing activity in absolute terms remains constrained.”
Cervone adds that moves remain significantly shifted “from discretionary to necessity-driven,” with many other factors at play: “cash buyers vs. mortgage buyers, global events like the Iran war and inflation.”
“It always comes down to a bottom line affordability concept for most consumers,” he concludes.
Looking ahead, the consensus is that relief from rate lock-in in the form of falling mortgage rates would give way to more activity in all segments of the market.
“If mortgage rates come down and affordability improves, I think that will help the market overall,” says Sturtevant.
Jones adds that the “pent-up demand has been accumulating for years,” and “normalization of inventory and modest price stabilization would lower the barrier further” for buying activity.
