Low Mortgage Rates Are Keeping Homes Off the Market in Bergen County

Written by:

Rudi Davis

Date:

04 Feb 2026

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Sergio Sciortino, a broker associate with Keller Williams Village Square Realty and a 25-year veteran of the Bergen County market, says the gap between pandemic-era mortgage rates and today’s borrowing costs has fundamentally changed seller behavior. Many homeowners who locked in rates below 4%, some as low as 2% or 3%, are now opting to rent out their homes rather than sell. “People have mortgages under 4%, 2%, 3%, and I get calls. I got a call yesterday, people are looking to move, and they said, Sergio, we have such a low rate, we’re going to rent our house,” Sciortino says. “Give us the price we can rent it for. With that difference, they could pay the bulk of the mortgage on the next one.”

This “rate lock” effect has created a structural shortage that ordinary market forces can’t resolve. Homeowners with low-rate loans now face new mortgages in the high 5% to low 6% range. The financial penalty for moving, selling their home, and buying another at current rates has become steep enough that many are choosing to keep their existing homes as rentals instead.

The Mathematics of Being Mortgage-Locked

The numbers illustrate why so few are willing to sell. Sciortino says rates must fall closer to those of existing homeowners before most will consider moving for anything short of a significant life event. “The rates have to come down to a number where people can say, okay, I have a three. Mortgages are at five. That difference I can take,” he explains. “But mortgages at six, and they’re in two or three, they’re really locked in. It has to be a major life event.”

For example, a homeowner with a $500,000 mortgage at 2.5% pays about $1,975 per month in principal and interest. At 6%, the exact loan costs around $3,000 per month, a difference of more than $1,000 per month, or $12,000 per year. For families considering a move to a similarly priced home, relocating now means paying $12,000 more per year to maintain the same standard of living.

This financial gap has led to a standoff. Sciortino doubts rates will ever return to pandemic-era lows. “If rates ever came down, they say the inventory would open up, but we’re never going to get back to those rates that we were during COVID,” he says. “You know, it would be a world meltdown. And if it were that, then nobody would be buying anyway.”

Inventory in Bergen County towns like Wyckoff and Ramsey has dropped to historic lows. “In Wyckoff, where my office is, you have four or five homes on the market. Ramsey, same thing, low inventory,” Sciortino reports. Towns that once had 80 to 100 homes for sale during the peak spring season now struggle to reach 20 listings.

How the Lock-In Effect Cascades Through the Market

This lock-in effect is reshaping the entire market, not just individual decisions. When homeowners refuse to move, the market becomes less efficient. Families who might otherwise upsize or downsize stay put. Retirees hesitate to relocate to the Jersey Shore or Florida. First-time buyers face a severe shortage of options and fierce competition for what little is available.

Sciortino describes a level of competition that’s become extreme. “I just bid on a property for a client in Ramsey, and they had 25 offers on that one property, and it went tremendously over list price,” he says. It’s now common for homes priced appropriately to attract 40 to 100 people at open houses, followed by multiple offers that push final prices $100,000 to $200,000 over asking.

The lock-in effect has also trapped some sellers who left the market during the pandemic. Homeowners who sold and moved into temporary housing, expecting to return, now find themselves priced out of their homes. “People have sold their homes, gone into temporary housing, which they call temporary housing, and they’re there two and three years now, because prices have risen so much that they’re almost priced out,” Sciortino explains. Those who moved to places like the Jersey Shore or Florida and now want to come back are often unable to afford reentry, as home values in Bergen County have risen faster than in many other regions.

What Would Actually Change This Dynamic

For the market to loosen, Sciortino believes rates would need to fall significantly and stay low—not just dip briefly. “Last week, there was a 5.99, it hit high fives for a quick minute because Trump was saying that Fannie and Freddie were going to be sold off. And it just went right back to the sixes. Right? It was a day or two,” he says.

He sees the threshold for real change as mortgage rates consistently in the 5% range. “Something in the fives consistently. I think that’s what we really need,” Sciortino says. That would reduce the penalty for moving and make it feasible for more homeowners to list their properties.

The Rental Conversion Solution

One emerging response to the rate lock is for homeowners to convert their primary residences into rentals rather than sell. By renting out a property with a low-rate mortgage, they can generate income that helps offset the higher payments on their next home. This solution isn’t perfect, but it provides some flexibility without sacrificing the advantage of their low-rate loan.

Whether this approach becomes widespread depends on how long mortgage rates remain elevated. If high rates persist for years, more homeowners may decide that renting out their old home is the only way to move forward. This would fundamentally change the nature of residential real estate in Bergen County, making ownership less liquid and turning more homeowners into small-scale landlords by necessity rather than by choice.

Looking Ahead: A Market Stuck in Place

The Bergen County housing market is locked in a cycle in which low-rate homeowners have little incentive to sell, while buyers face a shrinking pool of options and rising prices. Unless mortgage rates fall enough to close the gap, inventory will likely remain tight and competition intense. For now, the market is defined not by a lack of demand, but by a supply freeze driven by financial logic—and a growing class of accidental landlords trying to make the numbers work.