Is the Low-Rate Lock-In Grip Finally Loosening?

[Courtesy of our friends at the Texas Real Estate Resource Center at Texas A&M University]

Despite mortgage rates above 6 percent, Texas saw record seller activity in 2024–25, driven largely by existing homeowners. Life events, price gains, and market adjustment suggest the lock-in effect is easing.

Last year, the housing market delivered a surprising twist: Even with mortgage rates holding stubbornly above 6 percent, seller activity began to show signs of life. For a market that has spent the past few years frozen by the “lock-in effect,” this shift raised an interesting question: Are homeowners finally starting to move again?

For much of the post-pandemic period, the lock-in effect has been one of the most powerful forces shaping the housing market. Millions of homeowners refinanced or purchased when rates dipped to historic lows, often in the 2 or 3 percent range. Nearly three quarters of homeowners have an existing mortgage at around 5 percent or lower. Trading that in for a 6 to 7 percent mortgage felt unthinkable, or just unwise.

And yet, despite what feels like a long deep freeze, 2025 saw record seller activity—the highest since 2018 and highest in the post-pandemic period (see figure).

Source: Texas Real Estate Research Center analysis of Data Relevance Project, Texas REALTORS

Texas saw a notable surge in seller activity in 2024 and 2025. A record 596,000 new listings came to market in 2025, bringing the two-year total to more than 1.1 million. New listings climbed an additional 9.4 percent in 2025, marking two consecutive years of strong growth.

While some of the increase reflects rising new-home listings as builders ramp up construction, the strongest momentum actually came from existing homeowners, who are listing at a rising pace to drive the market activity. In 2024, new listings of existing homes rose 12.8 percent; in 2025, they rose an additional 10.8 percent to drive the market momentum.

First of all, life events such as job changes and family needs simply couldn’t be postponed any longer. With record home price appreciation, some sellers decided it was finally time to cash out and use the gains to move up or move on. Rather than waiting uncertainly for low rates to return, they chose to take advantage of today’s inventory conditions where they can be far more selective, an opportunity that may not come around again. While hard to measure precisely, many anecdotes also point to out-of-town buyers who purchased during the pandemic and then sold as prices reached their peak.

A gradual adjustment to the post-pandemic norm, or the “new normal,” is likely, and quietly, taking hold among homeowners and buyers alike. This shift doesn’t mean the lock-in effect is fully behind us, but recent seller activity suggests the grip may finally be loosening for many.