BETHLEHEM, Pa. — The “locked-in mortgage effect” that dominated real estate headlines in spring finally may be starting to ease, experts say.
The Greater Lehigh Valley Realtors said October data showed “a strong start to the fall selling season,” finally nudging some homeowners who were reluctant to move in a different direction.
The term "locked-in" refers to Americans who have been staying on the sidelines of the housing market due to holding low mortgage rates — many below 4%, and some in the 2s and 3s — as rates soared above 7%.
The end result? Homeowners who refused to budge meant fewer listings coming onto the market, leading to a decline in home sales and higher list prices.
"The ‘locked-in’ effect of homeowners feeling stuck-in-place with 2% or 3% mortgage rates from recent years is expected to lessen over time, and we are starting to see a small glimpse of that."GLVR CEO Justin Porembo
But the tide is starting to turn.
“The ‘locked-in’ effect of homeowners feeling stuck-in-place with 2 percent or 3 percent mortgage rates from recent years is expected to lessen over time, and we are starting to see a small glimpse of that,” GLVR Chief Executive Officer Justin Porembo said in a release.
“Not to mention, nationwide, there are 3.5 million new babies being born each year as well as the 1.5 million marriages, 700,000 divorces, 3.5 million people turning 65 and 25 million job changes that take place each year.
"All milestones that often trigger real estate moves."
October Stats
GLVR said closed sales increased 7.6% in October, coming in at 596 listings.
Inventory also increased 5.2%, at 774 units for sale in Lehigh and Northampton counties.
But with inventory still not balanced, the median sales price increased 11.8% to $346,500.
"Buyers and sellers in the Greater Lehigh Valley are making confident moves."GLVR President Lori Campbell
According to GLVR, other notable statistics for October included:
- New listings increased 10.9%, to 742
- Pending sales were up 17.6% to 608
- Months supply of inventory remained steady at 1.4 months
- Percentage of list price received slipped 0.6%, but still came in at 100.7%
- Homes sold, on average, in 18 days, the same as the previous October
“As we move into the heart of the fall season, it’s encouraging to see sustained activity and growth across various aspects of the market,” GLVR President Lori Campbell said in the release.
“Buyers and sellers in the Greater Lehigh Valley are making confident moves, supported by stable inventory growth and strong demand.
"We’re optimistic about the months ahead and remain dedicated to fostering a healthy market for our community.”
Where is the market heading?
According to HousingWire, the latest forecast from Lawrence Yun, chief economist for the National Association of Realtors, calls for a 9% increase in home sales in 2025 and a boost of 13% in 2026.
HousingWire’s own market forecast predicts home sales growing 5% in 2025, along with an outlook suggesting home price appreciation will slow, but not turn negative.
NAR this week released its 2024 Profile of HomeBuyers and Sellers, which said people who sell their homes on their own typically generate $55,000 less than homeowners who work with a Realtor.
"The typical For Sale By Owner home sold for $380,000 compared to $435,000 for agent-assisted home sales," Campbell said.
"With the support of a Realtor, consumers can expect expert understanding of the market and a purchase/sale at the price and terms they want and/or need."
