Are 2-3% Mortgage Holders Actually Starting to Sell Now?

Greg Powell
Oct 23
3 min read

For many homeowners who locked in historically low interest rates (2 %–3 %) during the pandemic era, the idea of selling is complicated. Moving would mean giving up a major financial advantage: the low monthly payment tied to that low rate. But in 2025, many things have shifted — market conditions, personal needs, rates, equity — so the question is whether these “locked-in” homeowners are now starting to sell.

Let’s dig in.

Why 2-3% Rate Homes Have Been “Locked In”

When interest rates were extremely low, many buyers locked in mortgages in the 2–3 % range.
Now that 30-year fixed‐rate mortgages are averaging around 6 % (or higher) in many markets, the cost to trade up or move is much higher.
Research shows the “lock-in effect” is real: homeowners with low rates are much less likely to sell because moving means a higher rate (and higher payment). Investopedia+2cnbc.com+2
One study noted that for every percentage point difference between current rates and a homeowner’s rate, the probability of listing drops significantly. Investopedia

So, until recently, many 2-3% rate holders sat tight.

Are They Starting to Sell Now?

The data suggests some are, but not in large numbers yet.

Signs of movement:

According to forecasts, more homeowners could be motivated to move as rates stabilize and other personal/life events take precedence. National Association of REALTORS®+1
A Redfin-based data point shows that about 21.3% of mortgaged homeowners had rates below 3 % (as of Q3 2024) and many of those are staying put. Redfin
Some reports suggest that while the lock-in effect remains strong, it is loosening somewhat — life changes (job moves, family growth, retirement/investment plans) are forcing decisions. cnbc.com

Why they’re still mostly staying:

Giving up a 2–3 % rate means sacrificing a major advantage. Many homeowners will only consider selling when absolutely necessary.
High current mortgage rates discourage people from taking a new mortgage.
Equity is still strong in many areas; some homeowners are comfortable staying put.

What This Means for the Market — Especially Central Oregon

In places like Bend, Redmond, and surrounding Central Oregon, the implications are:

Low inventory levels may continue as many homeowners stay put, especially those with ultra-low rates.
If/when more 2-3% rate owners decide to sell (because of job change, retirement, lifestyle), supply could rise and bring more choices for buyers.
For sellers: If you’re sitting on a 2-3% rate, your decision to sell will likely be driven more by major life changes than by market timing alone.
For buyers: Recognize that a major portion of the seller pool may remain constrained — fewer motivated low-rate sellers means less inventory pressure.

So, are 2-3% mortgage holders starting to sell? Yes, but slowly and selectively. The vast majority remain locked in by their low rates. However, the tide is shifting: personal life changes, slower growth, and a comfort with current rates may push more of them to list.

For Central Oregon, this means that while inventory remains tight, there is potential for more movement — which could improve buyer choice down the line.

FAQs

Q: If I have a 2 % or 3 % rate, should I wait to sell?

A: Unless you have a compelling reason (relocation, family growth, investment shift), many will wait until the rate differential isn’t as painful.

Q: Are there indicators that 2-3 % rate homes are choosing to move?

A: Yes — life-event triggers (job change, retirement, inheritance, etc.) seem to be the main driver rather than purely market factors.

Q: Does this mean home prices will drop when these owners move?

A: Not necessarily. The supply may increase when they move, which could moderate price growth, but prices depend on many factors (local economy, interest rates, demand).

Q: What should buyers in Central Oregon watch for?

A: Monitor listings for homes where owners note “must relocate due to job/family,” as those are more likely to come from low-rate locked-in owners. Also, check neighborhoods where aging homeowners may be downsizing.