The Lock-in Effect is Finally Cracking

[Rob Bergeron]

A few signals worth paying attention to this morning — not in isolation, but together.

Markets are increasingly pricing in a meaningful shift. Polymarket now shows an 89% probability the Fed cuts rates to 3% or lower in 2026. That doesn’t mean tomorrow. It does mean expectations are moving, and expectations tend to move capital before headlines do.

At the same time, the labor market is quietly sending up flares. The average job opening now receives 242 applications, nearly triple what it did in 2017. That kind of competition usually pairs with job volatility, slower hiring decisions, and people being more cautious about big financial moves.

Now layer in housing.

Mortgages with rates above 6% now make up 21.2% of all loans, the highest share since 2015. Sub-3% mortgages have fallen to 20.2%, the lowest since 2021. For the first time in years, there are more homeowners with high-rate mortgages than ultra-low ones.

That matters.

The lock-in effect — the thing that froze housing turnover near 30-year lows — starts to weaken once homeowners realize they’re already close to current market rates. When you’re sitting at 6.25% and the average is 6.15%, staying put no longer feels like a financial moat. Selling becomes emotionally and mathematically easier.

This is how markets thaw. Slowly. Unevenly. Then all at once.

For local context: the average 30-year fixed rate is 5.86% today, continuing to trend down. Inventory is at 3,127, which translates to roughly just under three months of supply at our current pace of sales. A healthy, balanced market typically has three to six months of supply. So while we’re technically still on the tighter side, the direction is clear — inventory is rebuilding, choices are expanding, and leverage is slowly shifting.

One broader thought before I wrap this up. With job volatility higher and competition for income increasing, this is probably a good time to learn a new skill, pick up an additional income stream, or diversify where your money comes from. Think about it!