Many Americans who bought homes when mortgage rates plummeted during the pandemic now say they feel stuck, creating a nationwide lock-in effect that remains significant today as the Trump administration pushes new policies aimed at loosening mobility in a strained housing market, according to The New York Times.
When Sandy Lachhman and Shaun Parmassar began searching for a home on Long Island in early 2022, they felt pressure to buy quickly. Mortgage rates were rising from historic lows, listings were scarce, and competition was intense.
Lachhman worked as a hospital operations manager, and Parmassar worked in cybersecurity, and both wanted to secure a home before the market shifted. After months of weekend searches, they purchased a two-bedroom, two-bathroom home with a pool for approximately $660,000, paying roughly $30,000 over the asking price at a 4% mortgage rate.
“The way the housing market was during the pandemic, it gave millennials such as myself a very good opportunity to get into the housing market,” Lachhman said. “It would have been a much more difficult process now.”
The couple’s payment is stable at about $5,000 per month, but with a dog, a toddler, and a baby on the way, the house now feels cramped. Their situation reflects a broader national trend.
During the pandemic, the average 30-year mortgage rate dropped below 3% for the first time, reaching a record low of 2.65% in early 2021.
A survey by Realtor.com found that 82% of homeowners felt locked in by their low rate.
“Many people bought their homes in the hopes it was an initial stepping stone on the path to a more ideal property; yet with higher interest rates and more limited inventory, that ‘starter home’ has become a long-term one,” said Courtney Alev of Intuit Credit Karma.
With many mortgages now below half the prevailing rate, a move often means paying sharply more for similar space. Freddie Mac researchers describe this as the mortgage-rate lock-in effect.
The Trump administration, working with Federal Housing Finance Agency Director Bill Pulte, has introduced proposals aimed at increasing flexibility for homeowners.
The Trump administration is reviewing portable mortgages that let borrowers transfer their existing rate to a new home. It’s also studying a 50-year mortgage that would reduce monthly payments by extending the term.
Pulte wrote Tuesday on X: “We are indeed working on The 50-year Mortgage, a complete game changer.”
Critics argue that longer terms increase total interest costs and do not expand the supply of homes. Supporters say the options could help families transition without surrendering the low rates secured during the pandemic.
For many, including families in Arizona, New Jersey, and Florida, the decision is now between staying put, taking on a far higher payment, or attempting costly renovations.
As homeowners hold on to their low-rate loans, inventory remains tight and mobility continues to slow until changes are made.
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