For years, one thought has quietly stopped many St. Augustine homeowners from making a move: “I’d love to change homes, but I don’t want to give up my low mortgage rate.”
If you locked in a rate near 3%, that hesitation makes sense. In fact, for many local homeowners, that rate has felt like a once-in-a-lifetime financial win. But there’s one reality we’re seeing every day across Anastasia Island, Vilano Beach, and Historic Downtown: a great mortgage can’t fix a home that no longer fits your life. In recent months, we’ve seen more homeowners starting to act on that realization.
The Lock-In Effect is Fading, Even in Coastal Florida Markets
Economists have spent the past few years talking about the “lock-in effect.” That’s when homeowners delay moving because replacing a low mortgage rate feels financially painful. But nationally, that freeze is starting to thaw.
Data from the Federal Housing Finance Agency shows fewer homeowners holding onto sub-3% rates as more people choose to move anyway. At the same time, the share of homeowners carrying mortgage rates above 6% has climbed to its highest level in a decade.
This isn’t because people suddenly love higher rates. It’s because life doesn’t pause just because interest rates changed.
Here in St. Augustine, we’re seeing this play out in very real ways. Longtime island residents are selling homes they bought years ago. Downtown owners are rethinking space, walkability, and lifestyle. Families who once planned to “wait it out” are realizing that waiting has a cost of its own.
Why Homeowners Are Moving Anyway
The motivation isn’t financial spreadsheets. It’s life.
Jobs evolve. Families grow. Priorities shift. A home that once felt perfect can quietly stop working, no matter how good the rate looks on paper.
As Redfin’s Head of Economic Research Chen Zhao recently explained, “more homeowners are deciding it’s worth moving even if it means giving up a lower mortgage rate. Life doesn’t stand still.” Those needs are now outweighing the benefit of holding onto a rock-bottom loan. Plus, many homeowners in St. Augustine are sitting on a solid amount of equity.
In our local market, we see these decisions driven by what the industry often calls the “Five Ds.”
The Five Life Changes Driving Moves in St. Augustine
If you’re following us on social media—and if you’re not, now’s the perfect time to hit that follow button—you’ve probably heard us talking about the “Five D’s”, as in Diamonds, Diapers, Divorce, Downsizing, and Death. It can sound a little heavy, but bear with us.
Diamonds: This refers to marriage or engagement. Often, when two people get married they want a new space that they can build together. It can also be related to career growth that leads homeowners to want something different, whether that’s more space, less maintenance, or a location that better supports their day-to-day rhythm.
Diapers: Growing families regularly outgrow homes they once thought would last forever. On Anastasia Island especially, we see families trading smaller beach homes for properties with more flexibility.
Divorce: Relationship changes can create the need for a new start, a new layout, or a different neighborhood altogether.
Downsizing: We’re seeing this trend become more common in Vilano Beach and downtown, where homeowners are choosing walkability, lock-and-leave living, and lower maintenance over unused square footage.
Death: Loss and legacy decisions often prompt people to move closer to family or to rethink where and how they want to live the next chapter of life. Alternatively, many heirs opt for estate sales over moving into the house themselves.
Why This Matters for Buyers and Sellers in Today’s Market
No mortgage rate can override these realities forever.
According to Realtor.com, nearly two-thirds of potential sellers have been thinking about moving for more than a year. That’s a long time to put life on hold.
Meanwhile, mortgage rates have already come down from their recent peak and are expected to ease modestly into 2026. While we may not return to the historic lows of the past, the market is stabilizing and buyers are adapting.
In St. Augustine’s most desirable neighborhoods, that combination matters. Sellers are sitting on significant equity. Buyers are still actively competing for well-located homes. And properties that are priced and positioned correctly continue to move.
The real question many homeowners are asking now isn’t whether moving makes financial sense on paper. It’s how much longer they’re willing to stay in a home that no longer supports the life they want to live.
The Bottom Line for St. Augustine Homeowners
Life doesn’t wait for the perfect interest rate. And neither should you. With rates easing from their peak and demand remaining strong in areas like Anastasia Island, Vilano Beach, and Historic Downtown St. Augustine, moving may be more achievable than it feels at first glance.
The key is understanding your options, your equity, and your timing within the context of our local market, not just national headlines.
That’s where informed strategy makes all the difference. Give us a call at The Newcomer Group at (904) 201-9393 and learn how we can help you achieve your real estate goals.
