The Mortgage Lock-In Effect: What It Means for Texas Homebuyers and Realtors in 2026

By Megan Bludau — Top Mortgage Originator in the Greater Houston Area

Over the past few years, you’ve probably heard the phrase “lock-in effect” floating around in housing conversations.

Here’s what it means — and why it matters more in 2026 than ever before.

The “lock-in effect” refers to homeowners who secured ultra-low mortgage rates (2–3%) during 2020–2022 and now feel financially stuck.

If someone has a 2.75% mortgage and today’s rates are 6–7%, moving means:

• Giving up a historically low rate

• Potentially doubling the interest cost

• Increasing their monthly payment significantly

So they stay put.

And that decision — multiplied by millions of homeowners — changes the entire housing market.

But, there's a shift.... let's explore it.

The Shift: Fewer 3% Mortgages, More 6% Mortgages

In 2022, nearly two-thirds of homeowners had mortgage rates under 4%.

Today? That number has dropped dramatically.

According to recent mortgage data trends:

• A growing percentage of homeowners now carry rates above 6%

• The share of sub-3% mortgages continues to shrink

• Each year, more buyers are entering the market at today’s rate environment

  
  

This matters because the psychological “I can’t give up my 3% rate” effect is slowly fading.

We are transitioning into a normalized rate environment, not an emergency one.

What This Means for Homebuyers in Texas

Here’s the key insight:

The longer we remain in the 6–7% rate range, the more buyers adjust.

When rates first jumped, buyers froze.

Now? They’re recalculating.

We’re seeing:

• Buyers factoring a refinance into long-term plans

• More realistic pricing expectations

• Increased acceptance of seller paid closing costs

• Strategic conversations around short- and long-term financing goals

The panic has cooled.

The math has returned.

What This Means for Realtors

For Realtors, the lock-in effect created two major challenges:

1. Reduced listing inventory

2. Hesitation from move-up sellers

But here’s the evolution:

As more homeowners now carry 6%+ rates themselves, the emotional gap narrows. Moving from 2.75% to 6.5% feels painful. Moving from 4.75% to 6%? Not as dramatic.

Over time, this reduces the “golden handcuff” effect.

Which means:

• More normal turnover

• More life-event-driven moves

• More realistic pricing

  
  

The market becomes transactional again instead of frozen.

The Bigger Picture: Rates Don't Drive the Market Alone

The lock-in effect is real — but it’s not permanent.

Housing demand is driven by:

• Job growth

• Marriage and divorce

• Babies

• Relocation

• Retirement

• Lifestyle changes

  
  

And Texas continues to see:

• Strong population growth

• Business relocation

• Employment expansion

  
  

Those fundamentals matter more long-term than temporary rate psychology.

The Real Questions Buyers Should Ask

Instead of asking: "Are rates going back to 3%?”

The better question is: "What is my short- and long-term housing plan?”

Because:

• You can refinance a rate

• You can’t refinance missed appreciation

• You can’t refinance lost time

• You can't refinance missing out on THE home

We are not in:

• 2021 bidding frenzy mode

• 2008 housing crisis mode

• Emergency rate shock mode

  
  

We are in a rebalanced market adjusting to sustainable borrowing costs.

And buyers who understand that have leverage.

The Bottom Line

The mortgage lock-in effect slowed the market temporarily.

But as more homeowners now carry rates above 6%, the psychological barrier is weakening.

For buyers: Opportunities still exist — especially with negotiation power and concessions.

For Realtors: Education and strategy matter more than ever.

For everyone: The market isn’t frozen. It’s evolving.

Ready to Start Your Homebuying Journey?

If you want to understand how today’s rate environment impacts your buying power or listing strategy in Texas, let’s talk numbers — not headlines.

👉 [Schedule your consult →] Schedule with Megan Bludau 

👉 [Submit your mortgage application→] Get Pre-Approved Now

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