One of the biggest problems in today’s housing market is something called the mortgage lock-in effect.
Millions of homeowners have mortgages at 3% or less.
They may want to move, downsize, buy a larger home, or relocate—but they don’t want to give up that low mortgage rate and replace it with a much higher one. So they stay put.
And that creates another problem: it helps keep home prices high. When fewer homeowners sell, fewer homes come on the market. But there are still plenty of buyers competing for those homes.
That imbalance between supply and demand keeps pressure on prices—especially in low-inventory markets like Cambridge, Somerville, Arlington and the surrounding communities.
Now Congress is considering a potentially significant idea. It’s called the MOVE Act, and it would help make portable mortgages available in the United States.
The idea is that qualifying homeowners could potentially take the interest rate, terms, and remaining balance of their existing mortgage and transfer them to their next home.
Imagine having a 3% mortgage and being able to take that mortgage with you when you move. That could remove one of the biggest reasons homeowners aren’t selling, bring more inventory onto the market, and potentially take some pressure off home prices.
The MOVE Act is only a proposal at this point—it’s not law. But if it passes, it could be a significant change for both homeowners and the housing market.
I’ll be following this closely and will keep you updated.