Family of 4 Outgrew Their 1,067-Square-Foot California Home, but There’s a Reason They’re Staying Put

A California family is sacrificing space for extra cash in their bank account.

The Sacramento family of four—plus two dogs—have long outgrown their compact home, but they say upgrading to a bigger property is not an option because it’ll mean giving up their ultralow mortgage rate.

Anna and Isaak Curry’s dilemma is a textbook case study of the “lock-in effect,” which has had a stranglehold on U.S. homeowners since mortgage rates began rising in 2022. 

In a nutshell, the lock-in effect refers to homeowners’ reluctance to sell because they have a low mortgage rate and would have to take out a mortgage at a significantly higher rate if they buy another home. 

This consideration has been top of Anna and Isaak’s mind, even as their family expanded and eventually ran out of space in their snug 1,067-square-foot Rancho Cordova home.

Speaking to the Sacramento Bee, the couple said they bought the three-bedroom, two-bath house in 2019. At the time, it was just the two of them, their newborn son, Kylan, and their dog, Echo.  

At the height of the COVID-19 pandemic, the family managed to refinance their home, clinching an enviable 2.25% mortgage rate.    

Since then, Anna and Isaak have welcomed a daughter, adopted a second dog, and have not ruled out having another child in the future.

What they need now is a bigger home to accommodate their growing family, but they told the outlet they are unwilling to let go of their low mortgage rate.

“How can you let go of 2.25%?” asked Anna, who works as a real estate agent and broker. “It’s like a treasure. You don’t get that ever again in your lifetime.”

Faced with severe space limitations, the Curry family improvised. 

The bedroom of their 1-year-old daughter, Lotus, doubles as a home office for Anna and her husband, who both work from home.

Sometimes, the tot spends part of the night in the parents’ bedroom if dad Isaak has to work late.

The family felt the squeeze of its too-small abode even more acutely in 2023, when Anna’s parents, grandparents, and brother all moved in with them after fleeing the war in Ukraine. 

The Ukrainian relatives have since relocated but could return in the future, Anna told the Sacramento Bee.

Sliding mortgage rates easing ‘lock-in effect’

The average 30-year fixed mortgage rate dipped slightly below 7% last week, settling at 6.95%—more than three times the family’s existing rate. 

The elevated rates have been keeping potential would-be sellers like Anna and Isaak on the sidelines for all of last year, which has had a chilling overall effect on the U.S. real estate market.

It wasn’t until January that the lock-in effect finally started easing, with new home listings jumping more than 10% compared with the same period last year, according to the latest data analysis from Realtor.com®.

“While rates remain elevated, it is possible that we might be seeing that chiseling effect starting as sellers may grow tired of waiting for significant changes in rates,” says Realtor.com Chief Economist Danielle Hale.

In Sacramento, the median list price last month was $615,000, up nearly 37% compared with 2019, and the number of active listings in the city shot up just shy of 40% since January 2024. 

From owners to renters

Anna and Isaak have no plans to offload their starter home anytime soon.

Instead, they will rent it out and themselves rent a larger property closer to their children’s school in El Dorado County.

But even renting is becoming increasingly pricey in Sacramento. In December, the median rent for a two-bedroom home in the city was $1,883, up 1.3% year over year, according to the latest available figures, making it one of the 20 most expensive large metros in the U.S.