Why More South Jersey Homeowners Are Giving Up Their Low Mortgage Rate
If you’re like many South Jersey homeowners, you’ve probably thought: “I’d like to move… but I don’t want to give up my 3% rate.” That’s completely understandable. That low rate has been one of your best financial wins. But here’s what you need to remember.
A great rate won’t make up for a home that no longer fits your life. Your needs change, and sometimes, your home must change with them. And you’re not the only one making this choice in our area.
The Lock-In Effect Is Starting To Ease
Many homeowners across Gloucester County and beyond have been stuck in place by what experts call the lock-in effect. This happens when you avoid moving because you don’t want a higher rate on your next home loan. But data from Federal Housing Finance Agency (FHFA) shows this effect is slowly easing for some people.
The share of homeowners with rates below 3% (the yellow in the graph below) is gradually declining as more people decide to move. While some people with rates over 6% are first-time buyers, the number of current homeowners taking on higher rates (the blue) is rising:
This shift is actually quite significant. The share of mortgages with rates above 6% just hit a 10-year high (see graph below). More people now see today’s rates as the new normal.
Why Are More People Moving Now Despite Higher Rates?
The answer is simple. Life can’t be put on pause forever. Families grow, jobs change, and priorities shift. A house that once fit perfectly in Cherry Hill or Mount Laurel may not work at all now – regardless of how good the rate was. As Chen Zhao, Head of Economic Research at Redfin, explains:
“More homeowners are deciding it’s worth moving even if it means giving up a lower mortgage rate. Life doesn’t standstill-people get new jobs, grow their families, downsize after retirement, or simply want to live in a different neighborhood. Those needs are starting to outweigh the financial benefit of clinging to a rock-bottom mortgage rate.”
First American refers to these life motivators as the 5 Ds:
- Diplomas: People with college degrees typically earn more. Perhaps you bought your home in Bellmawr when you were younger. Now with your career advancing, you’re ready to move up to a larger home in Mullica Hill.
- Diapers: You’ve outgrown your space. A new baby means your current Sicklerville townhome might not offer enough room anymore.
- Divorce: Ending a marriage (or starting one) often creates the need for a new living situation. This life change affects housing needs regardless of interest rates.
- Downsizing: Maybe your kids have moved out, and it’s time to simplify. A smaller house in Deptford means less maintenance and more freedom for you.
- Death: Losing a loved one might make you realize you want to be closer to family. Life is too short to live far from the people who matter most to you.
Whatever your reason, here’s what to consider. Yes, your low rate is valuable. But staying put means your life plans remain on hold. And that might not work for you anymore.
According to Realtor.com, nearly 2 in 3 potential sellers have been thinking about moving for over a year. That’s a long time to delay your plans, needs, and family goals. So perhaps the question isn’t: “Should I move?”
It’s actually: “How much longer am I willing to stay somewhere that no longer fits my life?”
We’ve already seen rates drop from their peak earlier this year. They’re expected to ease a bit more in 2026. When you consider this alongside the real reasons you need a new home, it may finally be enough to make that move happen.
Bottom Line
Life doesn’t wait for the perfect rate. Maybe you shouldn’t either.
With mortgage rates down from their peak and forecast to drop slightly more next year, moving may be more doable than you think. If you’re ready to see what’s possible in the South Jersey market, let’s talk about your options today.
