Rates | October 11, 2026
Rates peaked above 7.5% in 2023. Here is what that left behind.
Millions of owners are sitting on loans they could not get today, and that changes who sells and how.
In January 2021, Freddie Mac's weekly survey put the average 30-year fixed mortgage rate at 2.65 percent, the lowest in the survey's history. By late October 2023 it had climbed to 7.79 percent. Anyone who bought or refinanced in 2020 or 2021 now holds a loan priced far below today's market.
Economists call the result the lock-in effect. A homeowner with a 3 percent loan who sells and buys again takes on a much higher payment for the same kind of house. Many choose to stay. Fewer listings follow.
We do not know how long the gap will last, and we will not guess at future rates. The Freddie Mac survey updates every week, and the Federal Housing Finance Agency's National Mortgage Database publishes how outstanding loans are spread across rate bands. Check both for current numbers before you quote anything to a seller.
What it means for terms deals
Two things follow for people who buy on terms.
First, some sellers who need to move hold a cheap loan they would rather not pay off. A buyer who takes over the payments, with the seller's informed agreement, can look attractive to them. That is a subject-to purchase, and the due-on-sale clause means the lender can still demand the balance. The seller must understand that before agreeing.
Second, a buyer who needs a bank loan today faces high rates, which can leave a seller's house sitting. A lease option or seller-financed sale can reach a buyer the market has stopped serving, as long as the rules for owner-occupied sales are followed.
What to check
- The current Freddie Mac rate before any conversation about rates.
- Your seller's actual loan rate, balance and servicer.
- Whether your state restricts the structure you have in mind.
Sources
- Freddie Mac, Primary Mortgage Market Survey: https://www.freddiemac.com/pmms
- FHFA, National Mortgage Database: https://www.fhfa.gov/data/national-mortgage-database-nmdb
This is general information, not legal or tax advice. Please check with a licensed professional in your state.
