It’s hard to let go of a 3% mortgage rate. There’s no question about it. It’s the main reason why so many homeowners have delayed their move in recent years. But here’s something to consider.
While your low rate might be ideal, it doesn’t make up being too cramped, having a staircase your knees can’t handle anymore, or being 1,000 miles from your family. And those real-life needs are pushing more sellers off the fence despite today’s rates.
Data shows the share of homeowners with a mortgage rate below 3% is dropping as more people move. And, as a result, the share of homeowners taking on a mortgage rate above 6% is rising, too (see graph below):
The Biggest Reasons People Are Moving Right Now
What makes certain homeowners agree to pay a higher rate? Realtor.com’s survey provides some insight into that. 79% of homeowners who are thinking about selling today are doing so because they have to. Additionally, according to the same survey, the majority of the necessary reasons people move are not related to money (see graph below):
o any of these reasons resonate for you, too?
- You Need More Space: Outgrowing your space can happen quickly, whether it’s because of a new baby, kids who need their own rooms, or your parents moving in so you can take care of them more easily.
- You Need Less Space: Now that the kids are gone, you long for a slightly easier life.Because there are fewer rooms to maintain and clean, as well as lower utility costs, downsizing can be a huge relief.
- You Want to Be Closer to Family: Sometimes the allure of being close to loved ones outweighs the calculations, whether it’s helping with grandchildren or taking care of aging parents.
- A Relationship in Your Life Has Changed: A fresh start and a new place to call home may be necessary following a divorce, separation, or cohabitation following a marriage or new partnership.
- Your Job Is Taking You Somewhere New: You might have to relocate as well if you finally got your ideal job or if your partner’s business is moving.
What About Mortgage Rates?
Experts do anticipate a gradual decrease in mortgage rates. The most recent forecasts indicate only slight drops this year, not the 3% you might have hoped for (see graph below):
Therefore, waiting for a significant decline in rates may seem like a smart move, but it could also result in more time spent feeling trapped in an unsuitable situation. And that waiting game has lasted long enough for many people.
Nearly two out of three prospective sellers have been considering a move for more than a year, according to Realtor.com. Perhaps now is the time to inquire if you’re one of them:
How much longer are you prepared to put your life on hold?
Bottom Line
Perhaps five years ago, your current home was a good fit for you. However, that “for now” home you purchased in 2020? In 2025, it simply cannot meet your needs. And that’s normal, not just acceptable.