The typical mortgage holder pays roughly $1,300 in principal and interest per month, according to a new data report from Realtor.com. However, to purchase a typical home in today’s market, these homeowners would need to make a monthly payment of nearly $2,236, or a 73.2% increase in mortgage payments.
The roots of this “lock-in effect” can be traced to the record-low mortgage rates in 2020 and 2021 that fueled a spike in purchase and refinance activity. As a result, more than one in four current mortgages are dated to those two years alone. Origination activity collapsed when mortgage rates began rising – only 22.1% of outstanding mortgages originated from 2022 through August 2025. Rising home prices further exacerbated the problem.
“The lock-in effect isn’t just theoretical; it’s a significant factor weighing on the decisions of American homeowners,” said Realtor.com Chief Economist Danielle Hale. “When the average mortgage holder is staring down a $1,000-a-month cost increase just to move, that requires incredible budget flexibility that many households simply cannot manage and others choose not to take on. The ultra-low rates of 2020-2021 have become golden handcuffs, starving many local housing markets of much needed supply.”
Realtor.com noted the lock-in effect varies among major metro markets. The areas with the smallest lock-in effects include Pittsburgh, where homeowners face a 32.5% increase in monthly payments; Baltimore, where the increase is 34.0%; and Buffalo, New York, where the gap stands at 34.8%.
In more expensive markets, the locked-in effect is more acute. This is most notable in San Jose, which has a gap of 179.6% in estimated monthly payments; Los Angeles, with a gap of 176.4%; and Portland, Maine, with a gap of 154.8%.
Who wrote this article? One in four is 25%. 22% is only three less percent. Not some catastrophic drop off. Actually better numbers than one would have expected, in fact.
Also, the rates are only part of the equation. Also missing from this poor article is any mention of the fact that most people are moving into more expensive homes (be it due to size or location). Now, gee, I wonder why the costs-per-monthly payment spiked? Common sense just isn’t so common.
First of all we need some additional purchase price numbers and down payment amounts. Homes bought from 2018-2023 saw huge appreciation. If these increases are for an older purchase price with 20% down or even FHA with 3.5% down at 2-4% fixed interest rates then the numbers presented need to be the same home with the same down payment but at 6-7% mortgage rates. Here in the Indianapolis area a $250k home bought in 2018 is now worth around $375k in 2025. Many sellers and subsequent buyers are moving up so these statements don’t jive. Now, if people with lots of extra equity want a mortgage payment as low or lower than their previous home then they easily can put 25%-50% down. That extra down payment could be on an identical house or on a move up one. Many of these sellers are in “the cat bird seat”. I don’t buy the logic of this article.
This article is missing a lot of numbers. It doesn’t say whether the comparison is for a similarly priced home, same style and size home and doesn’t account for some people down-sizing while others move to larger homes. Oranges to oranges and apples to apples please!