Smart ways Wichita homeowners with 3% mortgages can move up without getting crushed by today’s higher interest rates

The Problem

If you bought a home in 2020–2021, your mortgage rate is likely around 3%.
Today, the average 30-year mortgage rate is about 6%+.

That gap creates what economists call the “lock-in effect.”

Definition:
Homeowners with very low mortgage rates avoid selling because they don’t want to replace their cheap loan with a higher one.

Research from the Federal Housing Finance Agency (FHFA) estimates this effect prevented over 1.3 million home sales in recent years.

But being locked in doesn’t mean you can’t move.

How Wichita Homeowners Can Still Trade Up

1. Buy Before You Sell

One strategy is buying your next home before selling your current one.

Why it works:

• Avoids rushing into a purchase

• Gives you time to sell at the right price

• Prevents temporary housing moves

Once your old home sells, you can apply the proceeds toward your new mortgage.

Many homeowners have built significant equity after years of home price growth.

Selling your home may allow you to:

• Make a larger down payment

• Reduce the loan amount

• Lower the monthly payment

Even with a higher interest rate, the payment difference can be manageable if the mortgage balance is smaller.

3. Keep the Home as a Rental

Some homeowners choose not to sell at all.

If your mortgage rate is around 3%, your payment is likely far lower than current market financing.

That means:

• Rent may cover your mortgage

• The home becomes an investment property

• You keep the low-rate loan

4. Life Still Drives Moves

Interest rates matter, but life events still drive housing decisions.

Common reasons homeowners move:

• growing families

• job relocations

• downsizing

• lifestyle upgrades

Economists note that even during high-rate environments, household changes eventually push people to move.