The US Mortgage Is Locked Up Tight: Here's What That Means If You're Saving for a New Home

For homebuyers still in the accumulation phase of life, the biggest short-term priority is to create liquidity and flexibility.

Brian O'Connell

Published: 7/15/2025, 1:00:15 PM EDT

The US Mortgage Is Locked Up Tight: Here's What That Means If You're Saving for a New Home — A maintenance worker sweeps the street in front of a row of new homes in Fairfax, Va., on Aug. 22, 2023. (Andrew Caballero-Reynolds/AFP via Getty Images)

When it comes to selling a new home, American homeowners are hitting the pause button in mid-2025, squeezed by high mortgage rates and skittish buyers.

According to the Bankrate 2025 Mortgage Rates Sentiment Survey, 51 percent of U.S. homeowners say they’re “uncomfortable” with selling their homes and buying a new one, even if mortgage rates begin to decline. (The average 30-year fixed mortgage rate in the U.S. is currently 6.76 percent, according to Bankrate, as of July 15, 2025.)

The study noted that 54 percent say there’s “no mortgage rate at which they’d be comfortable with selling their home.” That figure is up 12 percent from 2024, Bankrate reported, which suggests the current U.S. mortgage market is in a “lockdown” in 2025.

It’s not only homeowners who are walking away from potential property deals.

“Mortgage rates haven’t been below 6 percent in nearly three years, so buyers and sellers alike have reluctantly adjusted to high rates,” said Greg McBride, CFA, chief financial analyst for Bankrate, in a statement. “While many would-be buyers are holding out for lower mortgage rates, what constitutes ‘lower’ has evolved. Many that were pining for a return to 3 percent or 4 percent rates would probably jump for joy if rates fell into the 5 percent range.”

While patience is short among consumer property dealmakers these days, there are some smart moves to make to leverage a tight real estate market that won’t be locked down forever.

Get Realistic

The Bankrate report notes that buyers and sellers may be counting on mortgage rates to fall back to the 3 percent levels last seen in 2021 and 2022, just when the United States is emerging from the COVID crisis.

“It’s unlikely mortgage rates will return to those 3 percent levels in the near future,” Bankrate stated. “For starters, rates plunged that low because the global economy went into lockdown. The 2025 economy is far healthier than that. What’s more, inflation has remained above the Federal Reserve’s target of 2 percent.

Keep Stacking Cash

For homebuyers still in the accumulation phase of life, the biggest short-term priority is to create liquidity and flexibility.

“Create a cash cushion large enough to cover six months' worth of mortgage payments, and consider credit-enhancing measures like paying down high-interest debt or crawling your credit utilization ratio up just a little,” Sara Levy-Lambert, vice president of growth at Awning, a real estate rental services company, told NTD via email.

Home and apartment renters should also understand they’re paying for a mortgage, but not their own mortgage. It’s up to renters looking to own a home to change that equation.

“There are so many down payment assistance options out there right now, making homeownership within reach for so many,” Daniel Solis, branch manager at the homebuying services company New American Funding, told NTD by email. “The old perfect credit and needing 20 percent is a thing of the past. So stop spending money on DoorDash and those monthly subscriptions.”

Get Creative

On the timing front, buyers with a steady job for the next five years may still make sense, but you’ll also need to be open to nonstandard paths.

“Consider shared-equity agreements (where an investor will help with your down payment in return for a tiny share of future appreciation) or lease options, which can lock in today's price with an option to buy in the future,” Levy-Lambert said.

Hunt for Home Stability While You Wait

Renting remains a compelling option for those who require geographic flexibility or anticipate local market values to decline.

“Consider Sun Belt cities where home prices grew by double digits during the prior cycle; in those, rental rates have stabilized, making short-term leases more attractive,” Levy-Lambert noted. “On the other hand, if you’re in a high barrier market such as San Francisco, even buying a home with a 30-year fixed mortgage at 6.5 percent can be a hedge against rising rents.”

The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided