The Great Stay Is Thawing — What LA Homeowners Need to Know

The Great Stay Is Finally Thawing — What It Means If You Live in LA

For the past four years, the housing market hasn't crashed and it hasn't boomed — it's been stuck. Millions of homeowners who locked into ultra-low mortgage rates during the pandemic have been sitting tight, and understandably so. Trading a 3% rate for something above 6% is a difficult financial decision for any household.

Buyers have been priced out. Sellers have been locked in. And the result has been a market running on fumes, with home sales near historic lows — even in Los Angeles, where life events don't pause because of interest rates.

The real estate industry calls this era The Great Stay. But it's starting to thaw — and for buyers and sellers across the Westside, this shift changes the conversation entirely.

What Exactly Is The Great Stay?

Since 2022, Americans have been moving at historically low rates. The numbers are striking. According to Redfin, the typical homeowner has now stayed in their home for 12 years — nearly double the median tenure from two decades ago. A Storable survey from January found that 46% of respondents feel trapped in their current housing situation, and 73% of mortgage holders said they'd move if they could keep their rate.

The driving force is the mortgage rate lock-in effect. More than half of outstanding mortgages still carry rates between 3% and 4%, while today's rates sit in the mid-6% range. For a homeowner who locked in during the pandemic, selling and buying a comparable home could mean an increase of $700 or more per month. That math has kept people in place — even when their homes no longer fit their needs.

The ripple effects extend well beyond real estate. Homeowners have turned down job opportunities, delayed relocations, and postponed major life transitions because the financial penalty of moving felt too steep.

In Los Angeles — where housing costs are already among the highest in the country — the lock-in effect has been especially intense. Across Westchester, Playa del Rey, Playa Vista, and Mar Vista, homeowners who want to move and need to move have been waiting for the numbers to shift. That shift is now underway.

Why the Thaw Is Happening Now

Several factors are converging in 2026 that are beginning to unlock this frozen market.

The lock-in effect is fading. By the end of 2025, more American homeowners held mortgages above 6% than those with loans below 3%. In 2026, roughly 10 million homeowners will have mortgages above 6%, creating a growing pool of potential sellers who don't feel anchored to a rate they'd hate to give up. These homeowners behave very differently — they're more willing to list, more open to negotiating, and more ready to transact.

Incomes are rising faster than home prices. For the first time in years, wages are outpacing home price growth. National home prices are expected to be essentially flat in 2026 — up just 0.5% — while income growth continues. That dynamic is slowly repairing the stretched price-to-income ratio that has made homeownership feel out of reach for so many buyers.

Inventory is building. Active listings have risen for three consecutive years and now sit roughly 15% above last year's levels. Markets along the West Coast and Sun Belt — including parts of Los Angeles — are seeing some of the most meaningful inventory increases in years.

Life keeps happening. Marriages, growing families, job changes, downsizing, relocations — people can only defer major life decisions for so long. Real estate agents across the Westside are reporting increased buyer traffic and a noticeably more purposeful market compared to a year ago. Showings are up. Offers are being made. The momentum is real.

What This Means for Buyers in LA

For buyers who have been waiting on the sidelines, the landscape is shifting in their favor. More homes are coming to market, price growth has stalled in many areas, and sellers are becoming more flexible on negotiations and concessions.

The realistic expectation: 3% mortgage rates are not coming back. But affordability is improving through a combination of flat prices, rising incomes, and gradually easing rates — and that combination matters.

The best approach right now is to get pre-approved, understand the local market down to the neighborhood level, and be prepared to act when the right property comes along. Spring is already in motion across the Westside, and the buyers who move with confidence — not hesitation — are the ones landing the strongest deals.

Worth noting: new underwriting standards are beginning to evaluate a borrower's full financial picture rather than relying solely on a single credit score. That's a meaningful development for financially responsible buyers who may have been boxed out by rigid scoring thresholds in the past.

What This Means for Sellers in LA

For homeowners who have been holding off on listing because of their low rate, the calculus is changing — and in some cases, it may already make more sense to move than to stay.

With more sellers entering the market, pricing competitively from day one matters more than ever. The days of overpricing and waiting for a bidding war are largely behind us in most Westside submarkets. Buyer perception hardens quickly — often within the first two weeks on market — and homes that sit too long get passed over, even when the underlying property is strong.

The upside: buyers are out there, and they're more serious than they've been in years. A home that is well-maintained, strategically priced, and marketed effectively will find its buyer. And for sellers who are making a move within the LA market or relocating to a more affordable area, the math may work better than expected — especially as rising inventory provides more options on the purchase side.

The Bigger Picture

The Great Stay reshaped the housing market in ways the industry is still untangling. It suppressed inventory, inflated prices, and kept millions of Americans from making moves that would have improved their lives. But markets don't stay frozen forever.

2026 is not a return to the frenzy of 2021 or the correction of 2008. It's something more sustainable — a gradual normalization where affordability improves, mobility returns, and buyers and sellers find their footing again. Industry economists are calling it a "reset year, not a rebound year," and that characterization aligns with what the Stephanie Younger Group is seeing across Los Angeles.

The ice is thawing. The question isn't whether the market will start moving again — it's whether you'll be ready when it does.

For buyers and sellers on the Westside who want to understand how these trends are playing out in a specific neighborhood, the Stephanie Younger Group is here to help. Contact us at stephanieyounger.com/contact or call 310.499.2020. Our team can walk you through the data and help you determine whether now is the right time for your next move.