Suppose you’ve been searching for a home in Orlando lately. You’ve probably noticed something: inventory is low, competition is fierce, and the perfect property feels harder to find than ever. While population growth and high demand play a role, there’s another factor keeping homes off the market—the mortgage rate lock-in effect (NBER, 2024).
What Is the Mortgage Rate Lock-In Effect?
The mortgage rate lock-in effect happens when homeowners hold onto their current property because they have a significantly lower mortgage rate than today’s average. For example, many Central Florida homeowners refinanced or bought during the pandemic when interest rates hovered around 2.5%–3%. With today’s rates sitting closer to 6%–7%, selling and buying a new home often means doubling their mortgage rate (Bankrate, 2024).
For many, that trade-off simply doesn’t make sense—so they stay put.
Why Orlando Is Feeling It More Than Other Cities
Orlando’s housing market is unique. The city has seen years of rapid population growth, a booming job market in tourism and tech, and steady relocations from out-of-state buyers. Add in strong investor interest and limited new construction, and the lock-in effect hits harder here than in slower-growth markets (Orlando Regional REALTOR® Association, 2025).
In short, people want to move to Orlando, but current homeowners don’t want to move out.
The Numbers Behind the Shortage
- Over 80% of U.S. homeowners have a mortgage rate below 5% (National Mortgage Professional, 2024).
- A large share of Orlando homeowners are sitting on rates closer to 3% (Jared Jones, 2025).
- Listings in the Orlando area are down compared to pre-pandemic averages, despite buyer demand remaining strong (Orlando Regional REALTOR® Association, 2025).
That’s why buyers scrolling through Zillow or Realtor.com often feel like inventory is half as deep as it should be.
What It Means for Orlando Buyers
- Expect competition. Fewer listings mean more bidding wars and faster sales, especially in popular neighborhoods like Winter Park, Lake Nona, and Dr. Phillips.
- Be mortgage-ready. Having pre-approval in hand can help you jump quickly when the right property appears.
- Look beyond the obvious. Off-market properties, new construction, and fixer-uppers may provide more opportunities.
What It Means for Orlando Sellers
- Low competition works in your favor. With fewer homes on the market, your property stands out.
- Pricing strategy is key. Overpricing can still backfire, even in a tight market.
- Staging matters more than ever. With buyers fighting for fewer listings, well-presented homes can drive multiple offers.
Will the Lock-In Effect Loosen Up?
Experts predict that inventory will improve once mortgage rates start to stabilize or decline. If rates drop into the 5% range, more Orlando homeowners may finally decide to list their homes. Until then, the lock-in effect will likely keep the housing market tighter than usual.
Final Thoughts
The mortgage rate lock-in effect is a significant reason Orlando’s housing inventory feels so tight today. Buyers need to be strategic, and sellers have an advantage if they position their homes correctly.
If you’re navigating the Orlando real estate market and want tailored advice, reach out to Diamond Real Estate Group. Whether you’re buying, selling, or exploring your options, we’ll help you make informed decisions in today’s competitive market.
📲 Call or text 407-797-2931
📧 Email tiphany@dregorlando.com
🌐 Visit www.dregorlando.com to start your home-selling journey.
Meet Tiphany
Orlando Real Estate Pro
Buying a home is one of the most important purchases one can make, but it doesn’t need to be complicated. I’m Tiphany Weeks, the founder and broker of record for Diamond Real Estate Group. While traveling the world as a baseball wife we moved around a lot; and it wasn’t always easy. I realized the search to find a realtor that knows exactly what you need can be a very daunting task, so I decided it was time to create a new solution for helping people find their way home.
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