A survey found that about one in three Florida homeowners want to sell their homes but won't because giving up their pandemic-era mortgage interest rate simply costs too much. This equates to more than 113,000 homeowners in the state.
"Low mortgage rates were once seen as a major win for homeowners, but for some, they have become a quiet constraint," said a spokesperson for Calgary Home, which conducted the survey. "The survey shows that the mortgage lock-in effect is not just about housing supply or monthly payments. It is also affecting life decisions, from retirement plans and family choices to career moves and where people feel able to live."
"Many homeowners may be sitting on a great rate, but not necessarily in a home that still works for them," the spokesperson added.
The survey by Calgary Homes, a real estate platform, polled over 3,000 homeowners and found that 32% of Florida homeowners who want to sell their homes are unwilling to do so because they don't want to give up the lower mortgage rate they previously secured.
At the state level, that figure correlates to an estimated 113,730 homes caught in what is being called "mortgage-rate limbo."
These findings come at a time when Florida’s housing market, especially South Florida, is facing mounting pressure from multiple directions.
South Florida is already a national leader in all-cash home purchases and the region’s homeowners face some of the highest mortgage rates in the country.
WLRN reported in Feburary that one in 6 Miami homes are being sold to investors, crowding out traditional homebuyers.
READ MORE: Highest in nation: 1 in 6 Miami homes sold to investors, crowding out traditional homebuyers
The survey found that 35% of Florida homeowners had delayed a major life decision to keep their current rate. The most common delay was moving closer to family, cited by 11% of respondents, followed by relocating to a more affordable area, downsizing for retirement, and upgrading to a larger home.
The emotional toll has been significant, too. While 32% of respondents said they feel comfortable staying put — and 17% said they feel lucky to have their rate — 9% said they feel financially trapped. About 8% said they feel stuck in a home that no longer fits their life. In a surprising response, 15% of homeowners said they would accept a worse quality of life to keep their current mortgage rate.
Downsizing, often considered a straightforward step for retirees, is also getting caught in the freeze, with 26% of respondents saying they had delayed downsizing because a move would mean taking on a worse mortgage deal. It’s a sign that a smaller home no longer guarantees a smaller monthly payment when rates are significantly higher than pandemic-era lows.
Even with mortgage rates briefly falling below 6% earlier this year for the first time in years, they still remain well above the sub-3% rates many homeowners locked in between 2020 and 2021.
“More than a quarter of respondents, 27%, said they had felt resentful that their mortgage rate made moving financially unrealistic,” according to the survey.
The lock-in effect compounds a situation already marked by historically low homeownership rates in cities like Miami, and a proposal to drastically change property taxes, which could reshape homeownership in the state.
