A lot of the downsizing conversations I have stall on the same sentence: "I'll wait until rates come back down." Nobody says what they're actually comparing it to, because they don't have to — everyone knows the number. 2.65%. January 2021. The rate a lot of people either bought at or refinanced into, right before the market changed underneath them.
There's a name for what's happening here, and it's not really about the rate.
Psychologists call it anchoring — the tendency to fixate on one reference point and judge everything that comes after it against that number, even when the number itself was never normal. Once 2.65% became the anchor, 6.8% doesn't feel like roughly where rates have sat for most of the last fifty years. It feels like a loss. That feeling is real. It's just measuring the wrong thing.
Pull the actual history and the anchor looks different. Thirty-year rates averaged 13.74% in 1980, 9.97% in 1990, 8.08% in 2000, 4.86% in 2010, 3.99% in 2015. The 2.65% low was a record set during an emergency response to a global pandemic — not a point on a cycle that swings back around on its own schedule. Today's rate is closer to where mortgages have spent most of their history than the number everyone's anchored to.
Here's what the anchor obscures for anyone actually considering downsizing: the rate matters far less than it feels like it should. Most people moving from a bigger house into a smaller one are bringing significant equity with them, sometimes enough to buy outright. A higher rate on a much smaller loan — or no loan at all — isn't the same decision as a higher rate on a first mortgage. The percentage is identical. The dollar impact isn't close.
And waiting has a cost too, even though it doesn't show up on any rate chart. Every year spent in a house that's become more space and more upkeep than you need is a year of taxes, maintenance, and stairs you didn't have to keep paying for, in exchange for a number that may not come back in your lifetime.
I'm not in the business of talking anyone into moving before they're ready. But if the rate is the thing holding you back, it's worth asking what you're actually anchored to — a number from a historic anomaly, or a decision that might make sense on its own terms once you stop measuring it against 2021.