The Mortgage Rate Lock-In Effect Is Finally Easing: What Realtor.com’s New Data Suggests for Buyers & Sellers in 2026

For the last few years, the housing market has felt weirdly “stuck.” Not because people didn’t want to move, but because many homeowners were sitting on 2 to 3% mortgage rates, and moving meant trading that for 6 to 7+% mortgage rate.

That folks is what they call the “mortgage lock-in effect” (aka the “golden handcuffs”).

Check out my article from July 2022 on this topic for more insights on how it impacted potential sellers and their monthly payment amounts.

Now Realtor.com is indicating the lock-in effect is starting to loosen - and the numbers really do suggest we’re entering a new phase.

Let’s break it down in plain English, and then talk about what it means nationally and here in Washington State, including Snohomish and Skagit counties.

What is the mortgage lock-in effect (simple version)?

If you bought or refinanced when rates were super low, you probably have a mortgage payment you don’t want to give up.

So even if you want a different house, selling means:

• Taking a new mortgage at a much higher interest rate
  

• And often a much higher monthly payment
  

• Result: Fewer people list their homes, which keeps inventory tight and prices supported - even when buyers are rate-stressed.

Realtor.com’s “turning point” data: 6% mortgages now outnumber sub-3% mortgages

Here’s the big headline from Realtor.com’s mortgage analysis:

• In Q3 2025, 21.2% of outstanding mortgages were 6% or higher

• 20.0% were below 3%

• That’s a shift: The share of 6%+ loans has now edged past the ultra-low-rate loans.

Why this matters:

Every quarter that passes, more homeowners are in a more “normal-ish rate” world again (5 to 7%), which means moving is less of a psychological and financial barrier than it was when the majority of homeowners had ~ a 3% rate.

It doesn’t erase lock-in overnight, but it does slowly thaw mobility and listings.

Mortgage rates have come down, which helps the thaw

Freddie Mac’s weekly survey shows the average 30-year fixed rate was 6.06% as of January 15, 2026, down from 7.04% a year earlier.

That difference is a big deal for payments - and even a modest drop can bring:

• More buyers back into the market

• More sellers willing to make the jump (especially if they need to move anyway)

  
  

What this means nationally

• More listings over time (not a flood… more like a drip that becomes a stream)

• The lock-in effect loosening doesn’t mean the market gets instantly flooded with homes. But it does mean inventory has a better chance of gradually rebuilding as the ultra-low-rate share shrinks.

• The market can feel a little more “normal” and when more homes come to market, buyers tend to get:

  • More options

  • Fewer forced “buy in 48 hours” decisions

  • More negotiating room (depending on the price range and location)

• Inventory is still tight nationally

  The National Association of Realtors (NAR) reported December 2025 existing-home sales at a 4.35M annual pace, with 1.18M homes in inventory (3.3 months of supply).

So yes, things are loosening - but we’re not in “easy mode” yet.

What this means in Washington State

Redfin’s Washington statewide snapshot for December 2025 shows:

• Median sale price:  $611,400 (-0.21% YoY)

• Homes sold: +6.0% YoY

• Market pace slowed (median days on market up year over year)

Translation: WA is seeing more movement and a less frantic pace than peak lock-in years - while still not having tons of supply sitting around.

Snohomish County: More breathing room for buyers, sellers need a sharper pricing strategy and marketing prowess.

Redfin’s December 2025 Snohomish County stats:

• Median sale price:  $730,000 (-2.7% YoY)

• Median days on market:  39 days (up from 25 the prior year)

• Homes sold:  707 (down year over year)

What it likely means on the ground:

• Buyers have more time and less pressure than in the “everything sells instantly”, and often over asking era.

• Sellers can still win, but “list it high and see what happens” tends to be riskier when buyers are payment-sensitive.

Skagit County: Slower pace, pickier buyers, home sale prep matters

Redfin’s December 2025 Skagit County stats:

• Median sale price:  $574,950 (-2.6% YoY)

• Median days on market:  51 days (up from 41 the prior year)

• Homes sold:  110 (flat year over year)

What this suggests:

• The market isn’t “bad” - it’s just more selective.

• Homes that are well-priced and well-presented still move; everything else tends to sit and get negotiated.

So… is the lock-in effect “over”?

Not even close.

But it’s loosening because:

• Fewer homeowners are sitting on sub 3% mortgages than before

• Rates have improved from last year’s levels, making moves less financially painful

• Life events still force moves - job changes, downsizing, divorce, growing families - so turnover never goes to zero

The likely outcome for 2026: More listings, more transactions, less craziness, but still a market where affordability matters and proper pricing and marketing strategy is everything.

What should buyers do with this (2026 game plan)?

• Expect more choices as we move through the year, especially into spring.

• Don’t assume “more listings = big price drops.” Inventory is still not abundant nationally.

• Shop rates and loan options aggressively with your mortgage broker and/or bank - rate changes matter a lot right now. (if you need any referrals - I work with some great brokers and bank loan officers)

What should sellers do with this?

• If you’ve been waiting for the “perfect moment,” this “loosening” phase can actually be a solid window - more buyers are returning as rates cool.

• In Snohomish and Skagit, longer days on market means presentation + pricing matter more than they did a couple years ago.

FAQ:

Is the lock-in effect loosening in 2026?

Yes - Realtor.com’s data shows mortgages at 6%+ now slightly exceed the share of mortgages below 3%, signaling the market is gradually moving out of the ultra-low-rate era.

Will loosening lock-in make home prices fall?

Not automatically. It can improve inventory and slow price growth, but prices also depend on demand, jobs, and local supply.

What’s happening in Snohomish and Skagit counties?

Both counties show slightly lower median prices year over year and longer time on market, pointing to a calmer (more negotiable) environment than the peak frenzy years.

Thanks for taking the time to read this and of course if you have any questions or help needed, you can reach me here.

Cheers!

Joe