Employee relocations in 2025 face growing hurdles from an unsettled housing market marked by rising mortgage rates, tight inventory, and skyrocketing home prices. For homeowners locked into low interest rates, moving means giving up financial comfort, while first-time buyers confront fierce bidding wars and steep costs. Christine Haney, executive vice president of global relocation and referral services at Douglas Elliman, and Chris Lechner, president of Global Point Relocation Solutions, analyze these challenges and offer practical steps talent mobility managers can take to ease relocations and keep programs competitive.
Rising rates create not just financial strain, but emotional hurdles. “For a homeowner with a low interest rate who is faced with relocating and consequently taking on a higher interest rate at their new destination, the transition can be painful,” Haney says. “This is due not only to the actual difference in cost but also to the mental adjustment of knowing that if they decide to relocate, they will be in a position to pay a higher rate.”
On the other hand, first-time home buyers who are relocating may not feel the same pain as it relates to interest rates, as they have no prior reference point. In this case, Haney says, “homeownership remains a powerful motivator.” But for both homeowners, housing inventory plays a crucial role, particularly when looking for a home in a new location with low inventory.
“On the departure side, a transferring employee may find they can sell their home quickly, possibly even above the asking price. While this is a positive experience, the challenge arises when they become the buyer in a new location,” Haney says. “Depending on their budget and the destination market, a lack of inventory can create significant challenges. The bidding wars and above-list-price offers that they benefited from as sellers now become the very issues they face as buyers.”
Market Challenges in the California Market and Elsewhere
California’s housing market remains out of reach for many, with rising prices and high interest rates squeezing buyers and renters alike. “Even modest single-family homes are priced well beyond the reach of median-income households,” says Lechner. Higher interest rates have further eroded purchasing power, pushing more people into an already overburdened rental market.
Restrictive zoning laws, neighborhood opposition to higher-density development, and lengthy approval processes have limited housing production, creating an imbalance between supply and demand. “This tight inventory, combined with steady job growth and in-migration, is driving prices up across both rentals and homes for sale,” Lechner says.
Costs linked to regulatory fees, land, and construction are among the highest in the nation, discouraging many developers from building workforce and affordable housing without subsidies. “While policy measures such as rent stabilization, inclusionary zoning, and accessory dwelling unit incentives attempt to ease the strain, they have not scaled quickly enough to meet demand,” he says.
Southern California’s affordability crisis is structural. “Without significant reform in land-use policy, streamlined approvals, and targeted incentives to produce housing across all income levels, the region risks pricing out much of its workforce and eroding long-term economic competitiveness,” Lechner says.
The outlook offers little immediate relief. The ICE Technology Data home price index projects a slight dip in median home prices by mid-2026, but most homeowners are locked into mortgages with rates below 4%. Given that the current rate is above 6.5%, many owners are reluctant to sell or buy another home, compounding market challenges.
Haney adds that housing affordability across the United States can vary significantly, even at a micro-market level. Some parts of the Northeast continue to see low inventory, but in the higher-value markets, inventory may be healthier. In the South, some areas have more inventory in one neighborhood compared with another. “This is why it is imperative to work with a real estate agent who understands the micro-markets within their service area. They can offer transferees alternative areas that still match their search criteria,” she says.
Steps for Navigating Housing Affordability Challenges
Relocating employees face tough choices in 2025’s tight housing market, making it essential for talent mobility managers to provide clear, upfront guidance. “From the transferee’s perspective, they must decide if they can afford to buy or need to lease,” Haney says. “Providing education early helps prevent surprises.”
Haney emphasizes that relocation professionals should know both departure and destination markets well. Too often, transferees discover challenges only after the move begins, adding unnecessary stress. “Being proactive with data, updating policies, and setting expectations can smooth the process,” she says.
Market dynamics, such as interest rates, cannot be changed, but relocation managers can provide transferees the information and education they need to make sound decisions for themselves and their families. According to Haney, “Relocation management companies (RMCs) have access to the real estate community and relocation directors, with whom they can engage to obtain market details to all parties involved.”
RMCs should keep up-to-date on key markets to ensure that conversations with transferees are productive. “While the news may not always be what employees want to hear, it is far better to have these conversations upfront so they can make an informed decision,” she says.
Relocation managers also have the option to provide transferees with benefits to ease the transition. Lechner points to policies that can not only educate transferees about the buyer and seller agent compensation aspect of home buying but also mitigate the financial strain and streamline the process by reducing the unpredictability of out-of-pocket expenses. Among the other benefits they can offer are:
- Home sale assistance programs (e.g., guaranteed buyout or direct reimbursement of selling expenses)
- Temporary housing stipends for transition periods between the sale of their departure home and their destination home
- Coverage of closing costs
“On the mortgage side, firms can add real value by partnering with preferred lenders to provide mortgage rate buydowns, discounted origination fees, and flexible underwriting programs tailored to employees who may be carrying multiple mortgages during the transition,” he says. “Support with bridge loans, down payment assistance, and even tax gross-up on relocation-related reimbursements ensures transferees remain financially whole throughout the process.”
Creating a comprehensive package of real estate and mortgage support can go a long way in improving employee relocation satisfaction, employee retention, and strengthening the competitiveness of the company’s mobility program.
Lechner also points out that WERC’s North American Real Estate and Mortgage Forum has taken a data-driven and proactive approach to the housing affordability challenges facing talent mobility programs. “Through comprehensive benchmarking derived from current real estate and mortgage practices, the forum provides mobility stakeholders with actionable insights into the financial impact of evolving brokerage models,” he says. “These resources empower corporate mobility leaders and RMCs to implement policies that not only ensure compliance with emerging regulatory frameworks but also uphold competitive standards of support for transferees.”
Future of Housing Affordability
Housing and rental markets will remain in flux, forcing relocation managers to stay vigilant in addressing affordability pressures. “With median-income households increasingly priced out of the for-sale market, demand for rentals will stay high, pushing up rents and limiting availability in many metro areas,” Lechner says. “This creates a dual challenge: transferees may struggle to qualify for financing on purchases while simultaneously facing competitive, costly rental markets that limit their housing options.”
As a result, home search timelines will lengthen, increasing the need for financial assistance programs or temporary housing. This is particularly true if interest rates don’t drop significantly. Haney points out that even if rates do fall, “I don’t foresee rates dropping back to the record lows—or soaring to the historic highs of 18%.” Regardless, affordability challenges will persist.
Looking ahead, Lechner emphasizes the need for adaptable mobility programs that reflect market shifts. “If rates remain high, employers must prepare for reduced purchasing power and more ‘dual mortgage’ situations,” he says. Conversely, if rates fall, pent-up demand could push home prices even higher, tightening affordability.
Haney sums up the outlook for relocation professionals: “Those who can buy, will, but each micro-market will respond differently, and price points and inventory will continue to play a significant role.” Relocation managers will need agility and targeted support to help transferees navigate today’s challenging housing market.