Don't Press Pause on Your Life: Why Homeowners Are Moving Now, Even with 6%+ Rates

What's powerful enough to make homeowners abandon their coveted 3% mortgage rates? Despite the persistent "lock-in effect" narrative in today's housing market, something surprising is happening. Homeowners are increasingly willing to trade their ultra-low mortgage rates for today's 6%+ rates – and not for the reasons you might expect.

The data confirms what many real estate professionals are witnessing firsthand: the proportion of homeowners with sub-3% mortgage rates is steadily declining while those taking on higher-rate mortgages continues to climb. When we dig deeper into this counterintuitive trend, one factor emerges with striking clarity – necessity drives decisions more than numbers on a page. A remarkable 79% of homeowners considering selling today cite necessity as their primary motivation, with most reasons having nothing to do with finances.

Life simply evolves beyond our current walls. Growing families need more space as babies arrive or children need their own rooms. Empty nesters seek relief through downsizing. Relationship milestones – marriages, divorces, new partnerships – demand fresh starts. Career opportunities in distant locations can't be ignored. The desire to be closer to loved ones – helping with grandchildren or caring for aging parents – proves particularly powerful. These fundamental shifts create situations where even the most attractive low mortgage rate can't fix the fundamental problem: a house that no longer fits your life.

While many continue hoping for a significant rate drop, experts largely agree any decline will be gradual – leaving homeowners facing a critical question: how long are you willing to pause your life waiting for better rates? The waiting game has stretched beyond a year for nearly two-thirds of potential sellers, yet optimism persists. A surprising 70% believe now remains a good time to sell, bolstered by substantial equity gains and confidence in receiving strong offers. This isn't just talk – 96% have already taken concrete steps toward listing, from valuing their homes to contacting agents.

What mortgage rate would you trade for a home that truly supports your current needs? Instead of letting a single number dictate major life decisions, consider consulting a trusted real estate professional who can evaluate your complete situation. Remember: sometimes the right move isn't the one that saves the most money – it's the one that best supports the life you're actua

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Episode Transcript

Speaker 1 (00:00):
ever felt truly locked in by something,
something that maybe once seemedlike a huge plus.
Today we're diving deep into areally fascinating, maybe even a
bit counterintuitive, shifthappening right now in the
housing market.
For years, so many homeownershave felt well, quite literally

(00:20):
locked in, right, that feelingwhere you've got this amazing
low mortgage rate maybe 3% andit just feels impossible to
justify packing up, movingtrading that for today's rates,
which are what?
6% plus?

Speaker 2 (00:31):
Yeah, easily.

Speaker 1 (00:32):
But here's the really surprising part we're seeing
more and more peopleprioritizing something else
entirely.

Speaker 2 (00:39):
And it's not just a feeling.
The data actually confirms this.
It's quite an intriguingphenomena.
You look at the numbers and theshare of homeowners with those
really low mortgage rates below3%.
It's well.
It's slowly but surelyshrinking and at the very same
time the proportion ofhomeowners taking on new
mortgages above 6%, that'sticking upwards.

Speaker 1 (00:57):
Right.
So it throws up this reallycrucial question for us to
explore today, doesn't it?
What's really driving this?
Why are people moving, despite,you know, the much higher cost
of borrowing?

Speaker 2 (01:05):
Exactly what's powerful enough to make them
jump.

Speaker 1 (01:09):
So that's our mission for this deep dive to really
unpack the motivations here.
We want to get beyond just thenumbers and help you understand
what's truly at play in today'shousing market.
Let's start with that commonperception the lock-in effect.
It's a powerful idea, thatcomfort of a low monthly payment
.
It feels like a barrier.

Speaker 2 (01:27):
Oh, absolutely.
It's a huge factor, bothpsychologically and, of course,
financially.
Yet what's striking is, despitethat strong perception, the
data, like we said, it, clearlyshows people are moving that
slow decline in the sub-3% groupand the rise in the 6% plus
group.
Well, it tells us somethingfundamental is outweighing that
financial calculation for agrowing number of people, Okay.

Speaker 1 (01:47):
So if the pull of that low rate is so strong, what
actually makes people let go?
What could possibly compelsomeone to, you know, willingly
trade a 3% loan for a 6% or even7% loan right now?

Speaker 2 (02:00):
Well, necessity seems to be the short answer.

Speaker 1 (02:02):
Yeah, you know, when we look at a recent survey from
Realtorcom, one number reallyjust jumped out at me A
staggering 79%, nearly 8 out of10 homeowners considering
selling today.
They're doing it out ofnecessity, and here's the really
crucial part.
I think Most of these reasonsthey're not financial, they're
about life, life just happening.

Speaker 2 (02:23):
It's quite remarkable , isn't it, how often life
simply evolves beyond the fourwalls of our current home and
the source material it details.
So many of these specificcommon scenarios pushing
homeowners off the fence.
Think about growing pains orshrinking needs on the other
side.
Maybe a new baby arrivesSuddenly you need more space or
kids getting older and needingtheir own rooms.
Maybe aging parents are movingin Suddenly.

(02:45):
That house that felt perfect itjust doesn't quite work anymore
.

Speaker 1 (02:49):
Right or the opposite , like you said.

Speaker 2 (02:50):
Exactly the flip side .
You see empty nesters who arejust yearning for a simpler life
.
They find real relief indownsizing fewer rooms to clean,
less maintenance, maybe lowerutility bills too.
These are deeply personalshifts.

Speaker 1 (03:02):
And it's not just about the physical space, the
square footage.
It seems to go deeper.
It's about connection, maybe,or a feeling of home that isn't
just the building itself.

Speaker 2 (03:12):
You about connection, maybe, or a feeling of home
that isn't just the buildingitself.
You've hit on a key point thedesire to be closer to loved
ones.
That's a profound driver.
You know the need to help outwith grandkids, or maybe care
for aging parents.
That can be an incrediblypowerful motivator, powerful
enough to make the mortgage ratealmost a secondary concern.
And then you have those majorrelationship milestones right
Things like divorce orseparation, unfortunately, or,

(03:35):
on a happier note, maybe movingin together after getting
married, or a new partnership.
These moments often justnecessitate a completely fresh
start, a new home.

Speaker 1 (03:43):
Yeah, clean slate.

Speaker 2 (03:45):
And we can't forget careers.
A dream job opportunity pops upin another city, or maybe a
partner's company relocates them.
Sometimes, staying put justisn't really an option, is it?
Regardless of how great yourcurrent mortgage rate is?

Speaker 1 (03:58):
So what this really boiled down to, it seems, is
that these aren't just minorpreferences changing.
These are fundamental shifts inyour life.
And a low mortgage rate well,it just can't fix the fact that
your house doesn't fit your lifeanymore.
Maybe that for now house youbought back in, say, 2020, it
might have been perfect thenfive years ago, but it just
might not support the lifeyou're actually living or need

(04:18):
to live in 2025.
It's about what you need now.

Speaker 2 (04:22):
Right, needs change, priorities shift.
Now let's talk about thereality of those rates because,
let's face it, a lot of peopleare still holding out hope right
, hoping for a big drop.

Speaker 1 (04:32):
Yeah, waiting for 3% again.

Speaker 2 (04:34):
Well, freddie Mac offers a pretty clear
perspective here.
Experts, they largely agree Anysignificant decline.
It's going to be slow.
We might see some modest easingthis year maybe, but we're
still likely a long, long wayfrom the 3% world many
homeowners might be wishing for.

Speaker 1 (04:50):
In that reality.
It really brings up a toughquestion, doesn't it?
A question maybe you, listening, need to ask yourself how much
longer are you actually willingto press pause on your life
waiting for rates?

Speaker 2 (05:01):
It's a critical point and the data backs this up too.
Realtorcom found that nearlytwo out of three potential
sellers they've been thinkingabout moving for over a year.
That suggests the waiting gameas you called it.
Out of three potential sellers,they've been thinking about
moving for over a year.
That suggests the waiting gameas you called it.
It's just gone on long enoughfor a big chunk of homeowners.
They're ready.

Speaker 1 (05:18):
And it really is a waiting game tied to rates for
many.
That same data it specificallyfound that over half 55 percent
of those who've been consideringselling for over a year, they
specifically feel locked inbecause of current mortgage
rates.
They know their next mortgageis likely going to be higher.
That's a huge group feelingthat pinch.

Speaker 2 (05:36):
It is.
But here's a really fascinatingkind of counterintuitive detail
from the source material Whilemost potential sellers 78
percent think rates will eitherstay the same or even go up in
the next 12 months, for 43percent of those who expect
rates to rise this actuallyincreases their likelihood to
sell.

Speaker 1 (05:53):
Wait, so expecting rates to get.

Speaker 2 (05:57):
It suggests this interesting sort of behavioral
economics at play.
For some, the anticipation ofeven higher rates down the line
actually spurs them into action.
Now it's like a strategicdecision, maybe to move before
the cost of borrowing climbseven further.
Let's lock something in now,even if it's higher than my old
rate.

Speaker 1 (06:15):
OK, that is interesting.
Despite all this rate talk,there's actually optimism out
there.

Speaker 2 (06:20):
Surprisingly yes.

Speaker 1 (06:21):
Because here's another aspect that might
genuinely surprise you, giveneverything we've said about
rates sellers are well prettyoptimistic.
That Realtorcom survey.
It found 70% of potentialsellers actually believe it's a
good time to sell right now.

Speaker 2 (06:37):
It seems counterintuitive.
But this optimism, it seems tobe fueled by two main things.
First, the significant equityhomeowners have built up,
especially over the last fewyears.
Right, many have seen theirhome values shoot up.
That gives them a cushion, asense of financial security
moving into the next purchase.

Speaker 1 (06:52):
Okay, that makes sense.
Equity is the second thing.

Speaker 2 (06:55):
The second factor is a strong expectation about
getting a good price.
They expect buyer offers willmeet or even beat their asking
price.
In fact, get this 81% thinkthey'll get their asking price
or more.
That's pretty confident.

Speaker 1 (07:09):
Wow, okay.
So they feel they have equityand they think you'll get a good
price.
And this isn't just likewishful thinking, it's
translating into actual action,right?
You mentioned earlier, peopleare preparing Nearly every
potential seller 96% has alreadytaken steps to get their home
ready for sale.

Speaker 2 (07:24):
That's right.
This isn't just idle chatter,they're serious.
The source gives us somespecifics on what they're doing
71% have already checked theirhome's value Makes sense.
61% have researched prices intheir neighborhoods, seeing what
comparable homes are sellingfor.
38% have actually made homeimprovements or upgrades to
boost appeal.
And a pretty significant chunk36% have already contacted a

(07:47):
real estate agent.

Speaker 1 (07:48):
So they're really moving forward with the process.

Speaker 2 (07:50):
Absolutely.
It shows this isn't just avague idea.
For many it's activepreparation for a move driven by
those evolving life needs wetalked about.

Speaker 1 (07:58):
Okay, so let's try and bring this all together.
What does this mean for you?
Listening right now?
While mortgage rates yeah,they're undeniably a big factor
in the whole housing equation,Maybe the more profound question
for many homeowners is thiswhat kind of home do you need
now?
What supports the life you'reactually living today?

Speaker 2 (08:21):
day.
Yeah, connecting this to thebigger picture, it seems pretty
clear If your current house justdoesn't align anymore with your
needs, your priorities, yourlifestyle, maybe it really is
time to move forward and thisraises an important point,
doesn't it?
Instead of letting just onenumber, that mortgage rate,
dictate your life, maybe it'stime to talk to someone, a
trusted real estate professional, someone who can help you look
at your unique situation, yourwhole situation, and help guide

(08:41):
a move that genuinely takes yourlife forward, not just one
dictated by an interest rate.

Speaker 1 (08:46):
Right, it's about the life, not just the loan, and
that really leaves you with afinal thought to consider,
doesn't it?
What is a seemingly immovablenumber in your own life?
Maybe it's a mortgage rate,maybe it's something else
entirely that might actually bestanding in the way of a
necessary life-driven change youneed to make.