Why “Lock-In Effect” Is Shaping the 2025 Housing Market

by Maiyah Jimenez

If you’ve been keeping an eye on the housing market this year, you’ve probably noticed that inventory is still tight—and that’s not just because buyers are snatching up everything quickly. One of the biggest trends shaping today’s market is what we call the “lock-in effect.”

So, What Is the Lock-In Effect?

The lock-in effect refers to homeowners who are choosing not to sell their current home because they’re locked into an ultra-low mortgage rate—often somewhere in the 2% to 3% range. With current rates hovering around 6% to 7%, many homeowners feel financially “stuck.” Even if they want to upsize, downsize, or move closer to family, giving up that low monthly payment feels like too big of a sacrifice.

How This Impacts Buyers and Sellers

For sellers:

Less competition. If you're considering selling, you're not facing the flood of listings we saw during the 2020–2022 boom.
Higher home values. Limited supply is keeping prices strong in many markets.
Motivated buyers. Serious buyers are still out there, especially those relocating, upsizing, or needing multi-generational living options.

For buyers:

Less to choose from. With fewer listings, the hunt can take longer.
Creative strategies matter. Buyers are using rate buydowns, adjustable-rate mortgages, or seller credits to make the numbers work.

My Take as a Broker

I’ve worked through several market cycles, and this one is unique. Unlike the 2008 market downturn, today’s market is driven by scarcity, not oversupply. If you’re thinking of selling in 2025, you may be in a stronger position than you realize—especially if your home is turnkey or located in a desirable neighborhood.

For buyers, yes—it’s competitive and rates are higher, but that doesn’t mean it’s not the right time to buy. It just means we need a strategic game plan, good negotiation skills, and maybe some patience.

📞 Thinking of buying or selling in Long Beach or South LA County? Let's connect and talk about how the current market impacts your specific goals.

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