Housing Immobility due to property prices and rate lock-in

# Investigate Housing Immobility and the “Great Stay”

## Overview

Residential mobility in the United States has declined over the long term, while the rapid increase in mortgage rates beginning in 2022 created an additional barrier for homeowners with low fixed-rate loans. Moving often requires selling a home financed at a historically low rate and purchasing another home at a substantially higher rate.

Recent Federal Reserve research estimates that mortgage-rate lock-in explained approximately 44% of the decline in mortgage-borrower mobility from 2021 to 2022. The effect was concentrated primarily in local moves rather than moves between labor-market regions. Under the unusually tight housing conditions of 2022, the same lock-in shock was estimated to reduce homes’ time on the market and raise prices by restricting listings.

A separate causal study concluded that rising rates reduced the mobility of mortgaged households by approximately 16% during 2022 and 2023 and generated an estimated $20 billion in economic welfare loss.

Newer research suggests that lock-in affects the housing ladder unevenly. Homeowners who might otherwise downsize remain in larger homes, reducing the availability of properties for families seeking to move upward. Existing-home sales fell approximately 40% between 2022 and 2024, although not all of that decline can be attributed to lock-in.

The central research question is:

> **Are housing costs and mortgage-rate lock-in preventing Americans from moving to suitable homes, better jobs, or higher-opportunity communities, and what are the wider effects on labor-market efficiency, affordability, and household formation?**

The investigation should distinguish:

* **Mortgage lock-in:** reluctance to replace a low-rate mortgage with a higher-rate loan;
* **Price lock-out:** inability to afford housing in a desired destination;
* **Housing-supply constraint:** insufficient housing in places with strong labor demand;
* **Tenure constraint:** differences between renters, homeowners with mortgages, and mortgage-free owners;
* **Local immobility:** inability to change homes within the same labor market;
* **Geographic immobility:** inability to relocate to a different labor market;
* **Job lock:** remaining in a job because relocation or commuting is impractical;
* **Housing mismatch:** occupying a dwelling that is too large, too small, inaccessible, or too far from employment.

The recommended primary unit of analysis is the **household-year**, supplemented by county-pair, metro-pair, and labor-market-year analyses.

---

## Action Items

### Initial Evidence

Current evidence supports investigating a substantial mobility constraint:

* Mortgage borrowers became less likely to move after market rates rose above the rates on their existing loans. The decline was also visible relative to owners without mortgages, who do not face the same financing penalty.
* FHFA researchers estimated that mortgage lock-in prevented approximately 1.33 million fixed-rate mortgage sales between the second quarter of 2022 and the fourth quarter of 2023. Their model estimated a 57% reduction in sales among affected fixed-rate borrowers by the end of that period.
* The Federal Reserve estimated that lock-in raised home prices under the exceptionally tight conditions of 2022, but also found that the same rate shock would have had little effect in a more balanced housing market. This suggests that mortgage structure and housing scarcity interact.
* Mortgage lock-in has measurable labor-market effects. Research found that borrowers with greater lock-in were less responsive to nearby employment opportunities requiring relocation and were less likely to move into or out of self-employment.
* The effect may be more severe for movement within the housing ladder than for long-distance labor migration. Households may remain in starter homes, oversized homes, or unsuitable locations without necessarily remaining in the same regional labor market.
* Remote work complicates the relationship between residential mobility and employment. Between 2019 and 2024, the average distance between employees’ homes and employer worksites increased substantially, especially among highly paid workers and employees in information, finance, and professional services.
* Housing scarcity can magnify lock-in by making both replacement homes and rental alternatives expensive. FHFA’s public house-price indexes provide long-run price series for all states and more than 400 cities.

These findings establish that lock-in affects mobility, but they do not yet establish how much it reduces national productivity, job matching, family formation, or access to opportunity.

---

### Hypotheses

#### H1 — Mortgage-rate lock-in substantially reduces household mobility

The larger the difference between the market mortgage rate and a homeowner’s existing rate, the less likely the household is to move.

**Evidence to seek:**

* Mobility falls as the mortgage-rate gap increases;
* Effects are absent or smaller among renters and mortgage-free owners;
* Effects strengthen when the remaining mortgage balance is large;
* Mobility responds asymmetrically when rates rise versus fall;
* The relationship persists after controlling for equity and home-price appreciation.

A useful exposure measure is:

#### H2 — Lock-in primarily suppresses local housing adjustment

Many constrained households may decline to upsize, downsize, or move closer to work while remaining within the same labor market.

**Evidence to seek:**

* Within-county and within-metro moves decline more than interstate moves;
* Older homeowners delay downsizing;
* Growing households remain in smaller homes;
* Workers tolerate longer commutes rather than moving;
* Accessible homes remain occupied by households without accessibility needs because alternatives are limited.

#### H3 — Housing scarcity amplifies mortgage lock-in

Lock-in should have larger price and inventory effects where housing supply is already constrained.

**Evidence to seek:**

* The same rate gap produces stronger effects in low-inventory markets;
* Effects are larger where construction responds weakly to demand;
* Listing shortages are smaller in high-building metros;
* Price effects diminish after supply expansion;
* Zoning and permitting restrictions interact statistically with lock-in exposure.

#### H4 — Housing immobility weakens labor-market matching

Workers may remain in lower-paying or less suitable jobs because they cannot move closer to better opportunities.

**Evidence to seek:**

* Locked-in homeowners respond less to regional wage growth;
* Job switching declines more among homeowners than comparable renters;
* Employers in expensive regions experience persistent vacancies;
* Wage dispersion increases across locations;
* Remote work partially offsets the effect for telework-compatible occupations.

Research already indicates that mortgage lock-in reduces responsiveness to employment opportunities requiring relocation.

#### H5 — Reduced mobility slows wage growth and entrepreneurship

Changing employers and locations can produce wage gains or enable business formation. Immobility may reduce both.

**Evidence to seek:**

* Greater lock-in predicts fewer employer changes;
* Locked-in workers experience slower wage progression;
* Entry into self-employment falls;
* Business formation is lower among otherwise similar constrained homeowners;
* Effects differ by occupation and local labor demand.

#### H6 — Older homeowners remaining in larger homes obstruct the housing ladder

Downsizers may remain in family-sized homes because moving would increase financing and property costs.

**Evidence to seek:**

* Downsizing declines disproportionately among low-rate borrowers;
* Larger homes turn over less frequently;
* Starter-home and trade-up inventory becomes less available;
* Younger families remain in smaller housing for longer;
* Effects are larger in expensive metropolitan areas.

Recent modeling indicates that reduced downsizing is an important mechanism through which lock-in can sustain housing demand and prices.

#### H7 — Renters face a different form of immobility

Renters do not possess low mortgage rates, but high destination rents, deposits, moving costs, and unstable income may prevent relocation.

**Evidence to seek:**

* Rent burdens reduce interstate and metro mobility;
* Security deposits and moving costs affect lower-income households;
* Renters move frequently within distressed local markets but less often toward higher-opportunity markets;
* Rental assistance portability improves geographic mobility;
* Housing instability produces frequent moves without improved opportunity.

#### H8 — Housing constraints delay household formation

Young adults may postpone moving out, partnering, marriage, or having children because suitable housing is unaffordable.

**Evidence to seek:**

* High housing costs predict continued residence with parents;
* Household formation slows in markets with low vacancy;
* Fertility and marriage timing correlate with affordability shocks;
* Housing construction increases independent household formation;
* Effects differ by income, education, and family support.

#### H9 — Remote work reduces some geographic mismatch but may reinforce housing inequality

Remote-capable workers can access jobs without moving, while onsite workers remain geographically constrained.

**Evidence to seek:**

* Remote workers show weaker links between local job availability and mobility;
* High-income workers relocate toward cheaper housing while retaining high-wage employment;
* Service workers remain near expensive employment centers;
* Commute inequality grows between remote-capable and onsite occupations;
* Remote work reduces interstate lock-in more than local housing mismatch.

#### H10 — Demand subsidies may increase prices more than mobility

Tax credits or buyer assistance may increase purchasing power without expanding housing supply.

**Evidence to seek:**

* Subsidies increase transactions only modestly;
* Prices absorb a significant portion of the benefit;
* Effects differ between constrained and elastic housing markets;
* Seller credits redistribute access across housing segments;
* Supply-side reforms produce larger mobility gains per public dollar.

One 2026 model estimated that a proposed seller credit would produce only modest additional mobility and a very high public cost per marginal move.

---

### Research Plan

#### 1. Define the core outcomes

Measure:

* Probability of moving;
* Move distance;
* Same-county, same-state, interstate, and international moves;
* Home listing and sale;
* Time on market;
* Job change;
* Wage change;
* Commute distance;
* Household formation;
* Upsizing and downsizing;
* Entry into and exit from homeownership;
* Movement to higher-opportunity neighborhoods.

Primary mobility rate:

Housing mismatch may be measured using bedrooms, household size, age, disability, commuting needs, and affordability.

#### 2. Establish the historical mobility trend

Construct annual mobility measures from at least 2000 onward and separate:

* Pre-housing-crisis period;
* Great Recession;
* Low-rate period;
* Pandemic migration;
* 2022 onward rate-lock period.

Use segmented regression to determine whether post-2022 mobility differs from the preexisting long-run decline.

#### 3. Build a household-level mobility dataset

Recommended variables:

* Current and prior residence;
* Homeownership;
* mortgage status;
* estimated mortgage rate;
* mortgage origination year;
* household size;
* age;
* income;
* education;
* occupation;
* employment;
* remote-work status;
* commuting;
* housing costs;
* home value;
* rent;
* disability;
* family status.

Public data may not contain the exact mortgage rate for every household. Where necessary, estimate the existing rate from mortgage-origination year and historical average rates.

#### 4. Construct a mortgage lock-in index

For geography (g):

Where (b) represents mortgage-origination cohorts.

Create additional measures:

* Share of borrowers with rates below 3%;
* below 4%;
* below 5%;
* average remaining balance;
* estimated payment increase after moving;
* present value of forgone mortgage benefit.

#### 5. Identify causal effects

Compare households exposed to different rate gaps because of mortgage-origination timing.

Possible design:

Improve identification using:

* Origination-date variation;
* fixed-rate versus adjustable-rate borrowers;
* homeowners with mortgages versus mortgage-free owners;
* renters as a comparison group;
* boundary or policy discontinuities;
* household fixed effects where panel data are available.

Do not compare recent buyers directly with long-term owners without addressing major demographic differences.

#### 6. Separate local and labor-market moves

Classify moves as:

* Within neighborhood;
* within county;
* within metropolitan area;
* between labor-market areas;
* interstate.

This distinction is essential because current evidence suggests that mortgage lock-in may suppress local housing transitions more strongly than long-distance labor migration.

#### 7. Test labor-market consequences

Link mobility exposure with:

* Job openings;
* occupational wages;
* employer changes;
* earnings;
* unemployment;
* labor-force participation;
* self-employment;
* commute duration.

Estimate whether areas with more locked-in homeowners experience slower adjustment after local employment shocks.

#### 8. Analyze the housing ladder

Classify households and homes into:

* Renters;
* prospective first-time buyers;
* starter-home owners;
* trade-up owners;
* potential downsizers;
* mortgage-free older owners.

Track transitions between states and determine which segments are obstructed when turnover falls.

#### 9. Measure supply interaction

Add:

* Housing permits;
* completions;
* zoning constraints;
* developable land;
* vacancy;
* listings;
* time on market;
* price-to-income ratio;
* rent burden.

Estimate:

The interaction term tests whether supply scarcity magnifies lock-in.

#### 10. Evaluate household formation

Track among adults ages 18–39:

* Living with parents;
* living with roommates;
* independent household formation;
* marriage or partnership;
* birth rates;
* first-time home purchase.

Use housing-price and supply shocks to test whether affordability changes precede household-formation changes.

#### 11. Evaluate policy alternatives

Potential interventions:

* Increased housing construction;
* zoning and permitting reform;
* portable or assumable mortgages;
* mortgage-rate portability;
* bridge financing;
* targeted relocation assistance;
* reduction of transaction taxes;
* property-tax portability;
* downsizing incentives;
* expanded rental supply;
* employer relocation support;
* improved transportation access;
* remote-work flexibility.

Compare each policy on:

* Additional moves;
* effect on prices and rents;
* distributional effects;
* fiscal cost;
* labor-market benefits;
* housing production;
* risk of subsidizing moves that would occur anyway.

#### 12. Identify positive-deviant housing markets

Find regions with:

* High mortgage lock-in exposure but relatively strong mobility;
* High job growth without extreme housing-cost growth;
* Strong housing production;
* low commute growth;
* continued household formation.

Determine whether these places have more elastic supply, lower transaction costs, better rental alternatives, or stronger transportation networks.

#### 13. Conduct robustness checks

Repeat the analysis:

* By homeowner, renter, and mortgage-free owner;
* By age;
* By income;
* By household size;
* By remote-work ability;
* By local and interstate move;
* By high- and low-supply elasticity;
* With different mortgage-rate estimates;
* Before and after 2022;
* With and without pandemic years.

#### 14. Produce the Final PowerPoint

Recommended structure:

1. The long decline in American mobility;
2. How mortgage lock-in works;
3. Who is most exposed;
4. Local moves versus labor-market moves;
5. Housing inventory and prices;
6. The obstructed housing ladder;
7. Employment and wage effects;
8. Remote work as a partial escape;
9. Household formation;
10. Regional differences;
11. Policy simulations;
12. Highest-value interventions.

The presentation must distinguish:

* Mobility from migration;
* Local moves from interstate moves;
* Preference from financial constraint;
* Mortgage lock-in from housing scarcity;
* Transactions from household welfare;
* Home prices from housing availability;
* Remote employment from residential opportunity.

---

## Resources

### Data, APIs, and Where to Get Data

#### American Community Survey API and PUMS

ACS data include current residence, residence one year earlier, homeownership, housing costs, income, occupation, commuting, remote work, household composition, and demographic characteristics.

The Census API publishes geographic-mobility tables by age, tenure, citizenship, and other characteristics. The migration variables compare current residence with residence one year earlier.

Use for:

* Annual mobility;
* Homeowner-versus-renter comparisons;
* Household formation;
* Remote work;
* Commuting;
* Geographic and demographic differences.

#### ACS Migration Flows API

Provides origin-destination migration flows derived from current residence and residence one year earlier.

Use for:

* State and county flow matrices;
* Labor-market migration;
* Geographic corridors;
* Comparison of high- and low-lock-in areas.

Caution: particular flow releases contain comparability warnings, including changes affecting Connecticut and some state-to-county estimates.

#### Current Population Survey Annual Social and Economic Supplement

Use for:

* Annual mobility;
* reasons for moving;
* tenure;
* employment;
* household formation;
* family characteristics.

The CPS provides longer historical continuity than many mortgage datasets.

#### Survey of Income and Program Participation

Use for:

* Longitudinal household transitions;
* Moves;
* family formation;
* employment;
* income;
* housing tenure;
* program participation.

SIPP is particularly useful because it follows households through time.

#### FHFA Mortgage Lock-In Data

FHFA publishes supplemental and developmental aggregate data accompanying its mortgage lock-in research. The underlying work estimates sales prevented, mobility changes, and price effects associated with rate lock-in.

Use for:

* Lock-in exposure;
* Validation of estimated rate-gap measures;
* State and national trend analysis.

#### FHFA House Price Index

FHFA provides public house-price indexes extending back to the mid-1970s for all states and more than 400 U.S. cities.

Use for:

* Home-price appreciation;
* Market comparisons;
* Housing-cycle controls;
* Affordability and supply interaction.

#### National Mortgage Database Aggregate Data

FHFA publishes public aggregate statistics derived from the National Mortgage Database.

Use for:

* Mortgage origination;
* Loan characteristics;
* interest rates;
* borrower profiles;
* refinancing;
* performance;
* mortgage-market cohorts.

Public files are aggregated and may not support individual causal analysis.

#### Home Mortgage Disclosure Act Platform

The Consumer Financial Protection Bureau provides public HMDA loan-level data.

Use for:

* Mortgage applications;
* originations;
* loan amount;
* applicant income;
* occupancy;
* geography;
* loan purpose;
* lender;
* denial reasons.

HMDA does not follow households after origination but can measure market access and cohort composition.

#### Freddie Mac Primary Mortgage Market Survey

Use for:

* Historical market mortgage rates;
* Estimating the rate associated with each origination cohort;
* Constructing mortgage-rate gaps.

#### Federal Reserve Economic Data

Use for:

* Mortgage rates;
* home sales;
* listings where available;
* rents;
* employment;
* migration-related controls;
* interest-rate and macroeconomic series.

#### IRS Migration Data

IRS migration files report county-to-county and state-to-state inflows and outflows using changes in tax-return addresses. The latest currently published series covers 2022–2023.

Use for:

* Aggregate household movement;
* Adjusted-gross-income flows;
* Validation of ACS migration patterns;
* Origin-destination analysis.

IRS data do not directly identify mortgage status or reasons for moving.

#### Census Building Permits Survey

Use for:

* Housing permits;
* units per project;
* local supply response;
* multifamily and single-family construction.

#### Census New Residential Construction

Use for:

* Housing starts;
* completions;
* construction pipeline;
* national and regional supply.

#### American Housing Survey

Use for:

* Housing adequacy;
* household satisfaction;
* crowding;
* accessibility;
* moving intentions;
* neighborhood conditions;
* mortgages and housing costs.

#### Housing Vacancy Survey

Use for:

* Homeownership;
* rental vacancy;
* homeowner vacancy;
* housing-market tightness;
* household formation.

#### LEHD and LODES

Use for:

* Residence-to-workplace flows;
* commute distance;
* job accessibility;
* local labor-market structure.

#### Bureau of Labor Statistics APIs

Use for:

* Job openings;
* unemployment;
* occupational wages;
* employment growth;
* quits;
* labor turnover;
* local labor-market conditions.

#### Opportunity Insights Data

Use for:

* Neighborhood economic mobility;
* opportunity measures;
* cross-area comparisons;
* movement toward or away from high-opportunity communities.

#### Zillow, Redfin, or Realtor.com Research Downloads

Potentially useful for:

* Listings;
* inventory;
* rents;
* sale prices;
* time on market;
* price reductions.

These are valuable but should remain supplementary because coverage, definitions, and historical access can change.

### Foundational Resources

* Federal Reserve Board, *Locked In: Mobility, Market Tightness, and House Prices*.
* Liebersohn and Rothstein, *Household Mobility and Mortgage Rate Lock*.
* Fonseca and Liu, *Mortgage Lock-In, Mobility, and Labor Reallocation*.
* FHFA, *The Lock-In Effect of Rising Mortgage Rates*.
* Fonseca, Liu, and Mabille, *Unlocking Mortgage Lock-In*.
* NBER, *The New Geography of Labor Markets*.

### Central Scientific Caution

Low mobility is not automatically harmful. A household may remain in place because it is satisfied, has local family support, works remotely, or prefers stability.

The relevant counterfactual is:

> **Would the household have moved if suitable housing and financing had been reasonably available?**

The strongest investigation will compare:

1. Desire or reason to move;
2. Actual mobility;
3. Mortgage-rate exposure;
4. Housing availability;
5. Destination affordability;
6. Job opportunities;
7. Remote-work feasibility;
8. Family and community ties;
9. Household welfare after moving or remaining.

The most important finding may be that mortgage lock-in is not primarily preventing interstate migration. It may instead be freezing the **housing ladder within metropolitan areas**, leaving older households, growing families, first-time buyers, and workers with long commutes in mutually unsuitable housing arrangements.

- If this issue requires access to 311 data, please answer the following questions:
- Do you need a one-time or ongoing dump of the data?
- Do you need subset of data (i.e. certain years) or the entire data set (approx. 4 million rows or 11 GB)?
- If a subset is needed, please define subset characteristics (i.e. date range, etc.)
- Do you need online access via an API or a download of data?

No repository files, tests, or entry points are named. Start by narrowing the research plan to a defined household-year dataset and a small set of mobility outcomes, then identify the available data sources and analysis notebooks. The issue does not define a concrete completion criterion beyond investigating the listed hypotheses.

Written by the indexing model from the issue text.