For the last few years, a big reason inventory stayed tight was the lock-in effect: homeowners who refinanced at 2.5%–3% during the pandemic had zero incentive to sell and take on a new mortgage at 6.5% or higher. So they stayed put. That dynamic is finally starting to shift — and it matters for buyers and sellers alike.

What the Lock-In Effect Was

At the peak of the rate spike, roughly two-thirds of existing mortgages in the U.S. had rates below 4%. Moving meant giving up that rate and replacing it with something in the 7s. For most homeowners, the math simply didn’t work — even if they wanted more space, had an empty nest, or needed to relocate. So the homes that would normally have come to market didn’t. Inventory cratered. Prices held up despite high rates.

Why It’s Starting to Fade

A few things are happening at once. Rates have come down from that 7.8% peak to the 6.3%–6.5% range. That’s still not great, but it’s a lot more tolerable than it was. The gap between what locked-in homeowners have and what they’d be taking on has narrowed enough that life events — job changes, divorces, downsizing, growing out of a home — are starting to outweigh the financial disincentive.

Illinois new listings were up 2.9% year over year in March 2026. It’s not a flood, but it’s movement. Sellers who held on for two to three years are starting to make their moves.

What This Means for Buyers

More inventory is coming. Not all at once, but gradually. If you’ve been frustrated by a lack of options — particularly in specific neighborhoods or price points — that’s loosening. Homes that haven’t been available for years are starting to come back to market.

This is a reason to stay active and patient, not a reason to wait. The buyers who are engaged and ready to move will get first access to what comes available. The ones waiting for a perfect moment may find themselves back in competition when more buyers return too.

What This Means for Sellers

More competition is coming from other sellers. That doesn’t mean the market is turning against you — Lake County inventory is still well below historically balanced levels. But it does mean the window of unusually low competition is narrowing.

If you’ve been waiting for the right time to list, that time is now — before more of your neighbors make the same decision and you’re competing against a larger pool of listings.

Want to talk through timing and strategy for your specific situation? 847.650.4048 | joegattone.com