Written by: Internal Analysis & Opinion Writers
Mortgage industry data reveal signals pointing toward an uptick in home‑sales activity in 2026, driven largely by shifts in borrower behavior, equity patterns, and the unwinding of the “rate‑lock” effect. While affordability remains a headwind, the evolving mortgage landscape suggests increased turnover and sales opportunities on the horizon.
One key insight: homeowners saddled with high interest‑rate mortgages are more likely to move. Data show that a roughly equal share of U.S. borrowers now hold mortgages above 6% and under 3%—each represents about 20% of all outstanding loans. The contrast matters. Homeowners locked in at low rates have had little incentive to sell or refinance; those with high‑rate loans face much greater economic stress, making them more likely to list or consider relocation.
As these higher‑rate borrowers act, the market could see more listings and improved mobility, setting the stage for stronger sales volumes.
Another driver is soaring home‑equity. The average loan‑to‑value ratio across all outstanding mortgages stands near 44%, meaning most homeowners now carry more than 55% equity. That gives many the financial flexibility to sell—even if prices stabilize or decline modestly. Rapid equity accumulation has also created options for homeowners to tap equity, downsize, or move entirely, further boosting potential turnover.
The so‑called lock‑in effect—the phenomenon where ultra‑low mortgage rates prevent homeowners from selling—also appears to be eroding. With the average mortgage rate increasing relative to new‑loan market levels, fewer homeowners remain stuck with significantly favorable rates. As the spread between current rates and outstanding loans shrinks, movement becomes less costly from a rate‑perspective, which translates into more willingness to sell or upsize.
All of these dynamics point toward a 2026 in which home‑sales volumes could rise even if mortgage rates remain in the 6% range. The change doesn’t require dramatic declines in rates; rather, it hinges on mobility increasing as homeowner math becomes more compelling. For example, more homeowners with higher rates may decide it’s worth relocating, or younger‑segment buyers may find better options as inventory slowly expands.
Still, caution remains warranted. Affordability challenges persist: mortgage payments are higher than five years ago, and costs such as taxes and insurance continue to rise. While higher turnover aids supply, it doesn’t guarantee broad affordability for new buyers—particularly first‑time and low‑income households. Regional variation will also matter greatly; markets with growing supply and modest rate spreads will likely see more activity, while places with high costs and tight inventory may lag.
For real‑estate professionals and mortgage originators, the implications are significant. Increased turnover means opportunities: targeting homeowners with higher‑rate loans, refining outreach in equity‑rich segments, and positioning offerings to buyers who may benefit from mildly improved conditions. For investors and builders, the forecast suggests a modest housing‑market thaw—not a full recovery, but rather a step toward normalcy.
In summary, mortgage‑market indicators suggest that 2026 may bring improved home‑sales activity as rate‑locks loosen and equity cushions grow. While structural issues remain, the market appears better positioned to generate more movement and transactions.
