FHFA's 2026 Q1 rate distribution, the payment gap that keeps owners put, and Bend's active inventory by year from 2017 to 2026. It has been loosening, not tightening.
Most American homeowners hold a mortgage rate they could not get today, and it is the main reason Central Oregon's inventory stayed thin for years after demand cooled. This is the rate lock-in effect. Here is the mechanism, the current national numbers from the federal mortgage database, what Bend's inventory has actually done, and what would loosen it.
The mechanism
A homeowner with a $400,000 loan at 3.25% pays about $1,741 a month in principal and interest. The same loan at Freddie Mac's 6.71% for the week of September 3, 2026 costs $2,584. That is $843 a month more for the same house. A move to a comparable home means giving up the old rate and paying the new one, so an owner who would otherwise sell and buy stays put. Fewer sellers means fewer listings, even when buyers are ready.
How many owners are locked in
The Federal Housing Finance Agency's National Mortgage Database publishes the distribution of rates on all outstanding mortgages. For the first quarter of 2026, the most recent release, 19.5% of outstanding loans carry a rate below 3%, 49.9% are below 4%, 66.7% are below 5%, and 77.9% are below 6%. About one in five loans is at or above 6%. So roughly two-thirds of borrowers hold a rate at least a point and a half below today's, and half hold one nearly three points below.
We do not have a county-level version of that table, and we will not estimate one. The national figure is the number.
What Bend's inventory actually did
From our MLS database, the average end-of-month count of active single-family listings in Bend by year, read September 7, 2026:
- 2017: 409. 2018: 413. 2019: 378.
- 2020: 177. 2021: 120.
- 2022: 238. 2023: 239. 2024: 309. 2025: 408.
- 2026 through September: 396.
Inventory collapsed in 2020 and 2021 when rates fell below 3% and buyers pulled listings off the market faster than they came on. It has climbed every year since, and the 2025 average matched the pre-2020 level. So in Bend the lock-in effect has been loosening for three years, not tightening. What changed is not that owners got their old rates back. It is that life kept happening: moves for work, divorce, death, retirement, and the resort and second-home owners who decide to sell regardless of rate. The live count is on the Bend market page.
What would loosen it further
A lower mortgage rate narrows the gap for every locked owner at once, and the closer it gets to 5%, the more of the two-thirds it reaches. That is the number to watch, and our guide to how mortgage rates are set explains why the Fed's cuts have not delivered it. Short of that, inventory grows the slow way it has been growing, one household decision at a time, plus whatever new construction adds.
What it means for buyers and sellers
For a buyer, the lock-in effect means the choice is wider than it was in 2021 but the entry-level band is still where the fewest homes come on, because those owners are the most rate-sensitive. Set alerts and move quickly on the right one. For a seller, it means your competition is other sellers who had a reason to move, not the whole neighborhood, and the buyers you meet are paying today's rate, which is why the price and the credits matter more than they did in 2021. Our pricing guide covers the rest.
Questions
What is the mortgage rate lock-in effect?
Owners with a low mortgage rate stay in their homes because a move would mean paying today's higher rate on the next loan. Fewer owners selling means fewer listings. On a $400,000 loan, moving from 3.25% to 6.71% costs $843 more a month.
How many homeowners have a rate below 5%?
Two-thirds. FHFA's National Mortgage Database shows 66.7% of outstanding mortgages below 5% in the first quarter of 2026, 49.9% below 4%, and 19.5% below 3%.
Is inventory in Bend still constrained?
Less than it was. Bend's average active single-family inventory fell to 120 in 2021 and has risen every year since, reaching 408 in 2025, the same level as 2017 and 2018, per our MLS database. The lock-in effect has been loosening, not tightening.
What rate would unlock more sellers?
Every drop helps, and the closer the rate gets to 5% the larger the share of owners it reaches. Nobody can time that, so buyers and sellers should plan on the inventory growing slowly rather than all at once.
Where do these numbers come from?
The rate distribution is FHFA's National Mortgage Database, 2026 Q1, national, all mortgages. The mortgage rate is Freddie Mac's weekly average for September 3, 2026. Bend inventory is the monthly end-of-period active count in our MLS database, averaged by year, read September 7, 2026.
Next step
Get listing alerts for Bend so you see new inventory the day it lists, or Value my home if you are the owner deciding whether the move pencils.
Matt RyanOwner & Principal Broker at Ryan Realty.
