When Sandy Lachhman and Shaun Parmassar began house hunting on Long Island in early 2022, home buying felt like a race against time.
Mortgage rates rose from record lows and offers appeared to be disappearing quickly. Both had new jobs — Ms. Lachhman as a hospital operations manager and Mr. Parmassar in cybersecurity — and were eager to close a deal while they still could.
After spending nearly every weekend looking at homes for three months, the couple secured a two-bedroom, two-bathroom home with a pool, paying about $660,000, about $30,000 over the asking price, and a 4 percent interest rate.
“The state of the real estate market during the pandemic presented a very good opportunity for millennials like me to enter the real estate market,” said Ms. Lachhman. “It would have been a much more difficult process now.”
The couple is still in the house and, on paper, doing well. Your monthly payment of about $5,000 hasn't changed, leaving room for savings and entertainment. But life looks different. Now the couple has a Labrador retriever, an 18-month-old and another baby on the way, and the house feels a lot smaller than it used to.
It's a dilemma they share with many other Americans who have bought homes during the pandemic: financially devastated but still physically stuck and unsure of what to do next.
As the world shut down and mortgage rates plummeted, buying a home felt like the ultimate act of security. Americans rushed to buy, some pooling resources with siblings, partners or friends to make it possible. During the pandemic, 30-year fixed-rate mortgages fell below 3 percent for the first time, reaching a record low of 2.65 percent in early 2021, according to Freddie Mac. For many, this moment felt like a once-in-a-lifetime opportunity.
Those securing interest rates below 3 percent were “a rarity and something we may not see again for a very long time,” said Stephanie Williams, senior wealth adviser at investment firm AlphaCore Wealth Advisory. And according to a 2023 survey by Realtor.com and HarrisX, about 82 percent of homeowners said they felt “locked in” by their low mortgage rate, and more than half were waiting for conditions to improve before selling.
A few years later, some of these pandemic buyers find themselves caught between stability and a desire for change.
“Many people bought their home hoping it would be a first step toward a more ideal home; but with higher interest rates and more limited inventory, that 'starter home' has become a long-term home,” said Courtney Alev, consumer finance advocate at Intuit Credit Karma. “It can make people feel trapped.”
According to a recent survey by Intuit Credit Karma, nearly one in four homeowners regret their purchase, including 38 percent of Millennials who said they underestimated the cost of ownership and another 40 percent who have postponed other life goals. Add to that increasing costs and life changes—new partners, children, breakups—and stability can feel more like imprisonment.
In today's high-interest, high-price market, many homeowners can't justify trading in their 3 percent mortgage for one twice as expensive, said Jake Krimmel, senior economist at Realtor.com. Still, many homeowners looking for a change aren't sure whether to rent out their home, sell it, or stay put. With President Trump's recent proposal to take out a 50-year mortgage to make home buying more affordable, some are feeling pressure to maintain their low-interest, 30-year mortgages.
I'm stuck in a starter home
For Amber McDorman and her husband, buying a home in suburban Phoenix during the pandemic was a mix of luck and timing. They had started looking the year before, but the offers came and went in a flash: they were outbid for a week; The next year the prices jumped beyond their budget.
Then mortgage rates started to dip below 3 percent and started going up again. With an interest rate of 2.5 percent, the McDormans secured a three-bedroom home in 2020 for around $260,000. Five years later, they are still paying $1,300 a month and their equity has increased by 65 percent.
At the time, the home seemed perfect for two people with a child. But they've added a second child to their family, and both work primarily from home, often sharing the same office. The couple would love more space, but can't bring themselves to trade their mortgage for today's higher interest rates and property prices. Adding another bedroom or office could cost up to $50,000, Ms. McDorman said.
“I honestly feel like we're one of the lucky ones,” said Ms. McDorman, a social worker in her late 30s. “But we didn't plan for this to be our forever home.”
Moving – at a price
Lissette Debord and her husband decided to sell the starter home they purchased during the pandemic rather than stay in a place they had outgrown. They bought the house in 2020 in Sussex County, New Jersey, when they were both 21, during Ms. Debord's last semester of college, and used the money they saved from a virtual wedding on Zoom to secure a 2.7 percent interest rate. The couple were able to afford the $250,000 two-bedroom home through a combination of personal savings, bank loans and first-time buyer benefits.
The pandemic has made them rethink their priorities.
“Like, 'Are we going to invest one day or are we going to invest in something that will build our future?'” said Ms. Debord, now 26 and working as an analyst at an executive search firm.
Last year, they moved with their first child to a larger home in Jefferson, New Jersey, gaining an additional bedroom and more space. The trade-off was steep: Your new mortgage is now more than twice as high as the old one and has an interest rate of 6.6 percent.
Now that another baby is in the world, the higher payments have changed her life. Ms. Debord and her family have had to limit their outings and vacations and need to be more careful in managing childcare and other household costs.
“We took the risk,” Ms. Debord said. “It is what it is now.”
Start over in the same house
Ja'nise Johnson, 41, bought a four-bedroom home in Tampa, Florida, in 2019, securing an interest rate of around 3 percent. She had an insurance job for seven years, but when the pandemic hit in 2020, she was furloughed, making it difficult for her to keep up mortgage payments while raising three boys as a single mother.
Within the first year, she defaulted on her mortgage. She relied heavily on friends and family and took part-time jobs like DoorDash to make ends meet. But she didn't want to give up home to ensure the stability of her three children.
Last year she had to refinance her mortgage at a higher interest rate of 5.3 percent because she was behind on her payments. This caused her monthly payments to rise from $1,700 to $2,800, limiting her financial flexibility and ability to move.
But Ms. Johnson's biggest regret isn't buying the house or staying in it when she couldn't afford the cost: it's not about buying a house sooner.
“I probably would have owned my house by then,” said Ms. Johnson, who now works as a project manager for a financial services company. “Now I don’t know how long it will take.”