Sellers no longer deterred by lock-in effect, study finds

Homeowners are increasingly engaging with the housing market this spring, as many are beginning to let go of their historically low mortgage rates.

More than a third of sellers have mortgage rates below 5%, yet still plan to list their homes this spring, according to Coldwell Banker's 2026 Home Shopping Season Report, a survey of more than 700 real estate agents nationwide. 

Nearly 40% of agents said the mortgage lock-in effect was no longer a meaningful factor, or only a minor one, when sellers decided to list their homes. But 61% said it was still a major or moderate factor.

"Working through the lock-in effect will take time," said Jason Waugh, president of Coldwell Banker Affiliates, in a press release Thursday. "But we are starting to see early signs that it is loosening, particularly in the Midwest and in the West, which could have a meaningful impact on inventory."

This comes after a report released earlier this month found 35% of homeowners with a mortgage rate less than 6% wouldn't give it up for any reason. 

The lock-in effect, which disincentivizes homeowners to list their homes because mortgage rates have risen significantly, typically limits supply and dampens activity. But earlier indicators suggest renewed action across the market, with 43% of agents reporting a busier home shopping season than last year, Coldwell Banker found.

"We are seeing activity on both sides of the housing market this spring, but it is measured," Waugh said. "Buyers are prepared to move forward, yet they are focused on homes that meet long‑term financial and practical needs, and they are taking the time to evaluate their options. On the seller side, many homeowners are listing because their circumstances require a change, even if it means giving up a historically low mortgage rate."

This was echoed by a Redfin report released Thursday. New listings climbed 3% from a year earlier during the four weeks ending April 19, marking the largest increase since November. 

Pending home sales also fell 1.2% annually, the smallest drop in about a month, while mortgage-purchase applications rose 10% from the previous week, according to Redfin.

"The leaves are turning green, the flowers are blooming, and more sellers are listing their homes in hopes of moving before the next school year starts," said Adrianna Berlin, a Redfin agent in Grand Rapids, Michigan, in a press release. "While some people are holding off on selling or buying because they're holding out hope that mortgage rates will plummet, most have come to terms with today's costs. The people who need to move this summer are starting to list their homes or prepare for listing."

The agents surveyed by Coldwell Banker said 80% of buyers were actively looking for a home and no longer waiting for rates to drop further before purchasing a home.

Mortgage rates have decreased in three consecutive weeks, hitting their lowest level in the last three spring homebuying seasons on average, according to Freddie Mac. 

As a result, buyers have reentered the market. About 20% of current homebuyers paused their search in the last two years before coming back to the market this spring. The majority of those buyers returned with about the same budget, while 24% said their budget increased, Coldwell Banker found.

However, interest rates remain volatile on an intraday basis due to geopolitical tensions related to views on the status of the Iran conflict and inflationary impacts on oil prices that could make policy driven cuts to financing costs less likely.

At the time of this writing on Thursday, the rate-indicative 10-year Treasury yield had spiked at one point due to those concerns before receding to previous levels.