Should they stay or should they go? For U.S. homeowners open to a future move, it comes down to percentages. When asked to name the highest mortgage rate they would accept on their next home purchase, 54% of homeowners say 5.5% is their tipping point. Only 16% would take on a mortgage with a 7% interest rate, while just 7% would accept 7.5% or higher.¹

With the average 30-year fixed rate coming in at 6.81% as of April 24, it’s likely many Americans will wait a while before putting out ‘For sale’ signs.²

The ‘lock-in effect’

Nearly 7 in 10 borrowers currently have a mortgage rate below 4.5% and roughly one-quarter have an ultra-low rate below 3%.³  Moving to a new home would require those homeowners to take on a higher mortgage rate or put down more cash.

A 2024 study on the so-called ‘lock-in effect’ found that for every percentage point that market mortgage rates exceed the homeowners’ original interest rate, the probability of selling their home decreases by 18.1%.⁴

Read more: Homeowners reach record high of $35 trillion in equity

Still, most Americans surveyed remain hopeful that mortgage rates will fall to 6.5% or below by the end of 2025.⁵ Here’s where Americans predict mortgage rates will land by year’s end:

• 4% of U.S. adults said 7.5%
• 9% of U.S. adults said 7.0% to 7.5%
• 34% of U.S. adults said 6.5% to 7.0%
• 39% of U.S. adults said 6.0% to 6.5%
• 10% of U.S. adults said 5.5% to 6.0%
• 3% of U.S. adults said 5.0% to 5.5%
• 2% of U.S. adults said under 5.0%

The perks of staying put 

Nationwide, the typical homeowner stays in their home roughly 12 years — nearly twice as long as homeowners did 20 years ago.⁶ That’s partly due to the so-called ‘lock-in effect’, but also because the American population is older and is increasingly choosing to age in place: 75% of Americans age 50 and older would prefer to stay in their homes as they age.

Some 43% of Baby Boomer homeowners say they will never sell, compared to 34% of Gen X homeowners and 28% of Millennial or Gen Z homeowners.⁷ According to Empower research, 34% of American adults say they plan to retire one day in their current city.

Staying put can have perks. Generally, experts note there is often a positive correlation between the amount of time a buyer owns a home and the price appreciation: “Someone who lives in a home for 10 or 15 years is more likely to build greater wealth than a buyer who hopscotches between homes every few years, incurring transaction costs with each purchase and sale,” says Dr. Lawrence Yun, Chief Economist at the National Association of Realtors.⁸

Even if homeowners choose to stay put for now, they could reap the possible benefits of holding onto a lower mortgage rate for longer, allowing them to potentially save or invest more cash that they could then use to buy down the mortgage rate on their next property.

Read more: Mortgage rate buydown: What it is and how it works

What’s more, homeowners who meet IRS criteria can avoid capital gains taxes if and when they do choose to sell. In most cases, homeowners can exclude up to $250,000 of net profit from the sale of their main home (or up to $500,000 in gains for sellers who file joint tax returns) if they have owned and used the home as their primary residence for at least two out of the five years preceding the sale.⁹