Federal Reserve Bank of Atlanta
08/03/2026 | Press release | Distributed by Public on 08/03/2026 09:01
Mortgage Lock-in: A Review of the Literature
Mortgage Lock-in: A Review of the Literature
August 03, 2026
Kristopher S Gerardi Research Economist and Senior Adviser
Franklin Qian University of North Carolina at Chapel Hill
David Zhang Rice University
Summary
The authors of this working paper survey the growing literature on mortgage lock-in and its effects on household mobility, labor reallocation, home sales, owner-occupied prices, and spillovers into rental and commercial markets. They also discuss an array of potential policy options.
View PaperWorking Paper 2026-11
Abstract: This paper reviews the rapidly growing literature on mortgage lock-in and its effects on household mobility, labor reallocation, home sales, owner-occupied prices, and spillovers into rental and commercial markets. We then discuss two future research directions: (1) separately identifying lock-in effects from the direct effects of the existing interest rate on the mortgage, which have different implications for household behavior as market interest rates rise, and (2) assessing the general-equilibrium consequences of reduced mobility on labor markets and productivity. We close by discussing policy responses, including portability, broader assumability, and a Danish-style delivery option.
JEL classification: G18, G21, E52
Key words: mortgage lock-in, fixed-rate mortgage (FRM), household mobility, house prices, rents
https://doi.org/10.29338/wp2026-11
The views expressed here are those of the authors and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility.
Kris Gerardi is with the Federal Reserve Bank of Atlanta. Franklin Qian is with the University of North Carolina. David Zhang is with Rice University. Please address questions regarding content to , Federal Reserve Bank of Atlanta, 1000 Peachtree Street NE, Atlanta, GA 30309.
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