Speaker: Pierre Mabille (Insead)

Paper Title: Unlocking Mortgage Lock-In: Evidence From a Spatial Housing Ladder Model* (joint with Julia Fonseca and Lu Liu)

Date: Wednesday 11th/Feb/2026 at 9:00 AM Eastern Time

Abstract: Mortgage borrowers are "locked in": forgoing moves to keep low mortgage rates. We study the general equilibrium effects of mortgage lock-in on housing markets. We provide causal evidence that lock-in increases prices, particularly in expensive areas, because locked-in borrowers would otherwise demand less housing. We design a spatial housing ladder model with long-term mortgages, generating a distribution of locked-in rates and equilibrium effects on mobility and prices consistent with the data. A temporary rate hike causes lock-in, increasing housing demand and prices, especially in expensive areas. A $10k tax credit to starter-home sellers modestly unlocks mobility while increasing trade-up home prices.

Registration: https://us06web.zoom.us/webinar/register/WN_EK714uQiTdyauj6eQFQXcA