Today’s mortgage interest rates are higher than 2021’s historic low of 2.96%, creating a “lock-in effect” where today’s homeowners aren’t moving because they don’t want to give up their desirable rates. This shift has reshaped affordability at a time when many U.S. markets also face tight housing inventory and persistent inflation. For mobility managers, these market conditions create challenges for both employees making relocation decisions and the employers supporting them.
Kayla McGuire, CRP, national sales director for corporate home lending at Chase, and Kevin Felder, ABR, CRP, GDS, TCLS, TCLPM, relocation director for Felder & Company Realtors and vice chair of the WERC Real Estate and Mortgage Policy Forum, offer insight into the current interest rate climate and what it means for relocating talent, providing some practical steps on how to help employees navigate the market.
Market Pressures Require Buyer and Seller Preparation
McGuire notes that affordability depends on more than just mortgage rates, and the current climate is particularly challenging for first-time homebuyers. “It’s important for borrowers looking to purchase a home to understand how much home they can afford,” she says. “There are a variety of online tools and calculators, like Chase’s Home Affordability Calculator, that allow homebuyers to see how exactly rates impact monthly costs.” Relocating employees, like local homebuyers, can prepare ahead of time to navigate market pressures. This helps transferees understand destination affordability before their move, reducing surprises and stress.
To prepare, transferees should consider these key factors when purchasing a new home:
- Credit score: A strong credit score can lead to better loan terms.
- Loan type: Understand the differences between fixed-rate and adjustable-rate mortgages. Meet with your company’s in-network lenders to understand what loan type—conventional, FHA, VA—might make the most sense for the specific situation.
- Down payment: The size of the down payment can affect loan terms and monthly payments. There also might be local grants and assistance programs within the new community to which the new community employees are relocating.
- Local market conditions: Researching the housing market in the destination location to understand pricing trends, competitiveness of the market, and what employees should reasonably expect in terms of buying in a new market.
For employees who already own a home, preparation also means being strategic about home sales. McGuire notes sellers should watch for favorable conditions to maximize returns and pay attention to closing costs.
“For buyers, higher rates may mean increased monthly payments and potentially reduced purchasing power. Renters, on the other hand, might see increased rental prices as landlords adjust to market conditions,” McGuire says. “Both groups should carefully evaluate their budgets and consider negotiating terms where possible.” Among the tools and resources transferees can tap into in their relocation journey include:
- Budgets: Create a detailed budget to account for potential increases in housing costs.
- In-network lender: Lenders within the company’s relocation program may be able to offer relocation-specific interest rates, reduced fees, and also bill covered expenses to the employer, when available.
- Lock in your rate: Knowing rates fluctuate daily, some lenders offer the ability to lock in the day’s rate while you shop for a home.
Program and Policy Impacts for Mobility Managers
Rising mortgage rates have ripple effects for relocation programs. “Higher rates can increase costs and exacerbate employee reluctance to relocate because of mortgage-rate lock-in, discouraging employees from leaving low-rate mortgages behind,” Felder says. In response, he encourages mobility managers to adapt policies quickly as market conditions change.
“In this climate, managers must re-evaluate traditional relocation packages and offer creative, flexible solutions to remain competitive,” he advises. Some strategies include:
- Extending or adding extra home-finding trips.
- Offering mortgage buydown assistance to reduce rates.
- Increasing housing budgets or rental allowances to offset higher costs.
- Providing rental options for employees who prefer to delay buying until conditions stabilize.
These policies can prevent employees from having to compromise on home size, neighborhood quality, or school districts, reducing relocation stress. “It’s a win-win,” says Felder, “allowing transferees to secure the home they want while employers reduce the anxiety tied to mortgage affordability.”
Building Confidence Through Communication and Flexibility
Mobility managers who clearly communicate relocation options, such as rental assistance, home-sale incentives, or temporary housing support, consistently see higher employee satisfaction. Rising home inventories in some destination locations further improve opportunities, giving transferees more flexibility to find a suitable property.
Felder emphasizes the role of ongoing dialogue. “By understanding a transferee’s housing needs, mobility managers can create flexible programs to help employees achieve their personal and professional goals at the destination,” he says.
Strategy for Future Relocation Needs
Looking ahead, mobility programs must remain agile. Felder underscores the importance of proactive planning, noting, “By remaining responsive to challenging market conditions, mobility managers can create adaptive programs and policies to meet transferees’ changing needs.” Pre- and post-relocation surveys of transferees’ relocation experiences can augment mobility managers’ data and inform policy and program changes in dynamic markets. He adds, “A peer best practices study can ensure that mobility managers are following industry best practices to meet their employees’ needs.”
According to McGuire, staying abreast of employment and inflation data, which can influence mortgage interest-rate movement, ensures that mobility managers can anticipate market changes. Additionally, changes in housing policy can influence the market, making it critical to track industry expertise. “In-network lenders,” McGuire says, “have the tools to provide meaningful cost savings, as well.”
Even in a climate of higher rates and limited affordability, mobility managers have tools to help employees succeed. By combining financial education, creative policy solutions, and open communication, organizations can ease employee stress, support retention, and keep relocation strategies competitive in evolving markets.