The U.S. housing market is grappling with a persistent shortage of homes, and one major reason is the “lock-in effect.” Homeowners with ultra-low mortgage rates secured during the pandemic are reluctant to sell, even as market demand grows. This hesitance is tightening inventory, driving up prices, and reshaping the dynamics of both buying and selling real estate in 2025.

With interest rates nearing 7%, many homebuyers in the U.S. are exploring assumable mortgages as a strategic way to save money. By taking over a seller’s existing home loan with a lower interest rate, buyers can reduce their monthly mortgage payments significantly. This article explains how assumable mortgages work and why they’re gaining popularity in today’s housing market.