In this episode of the Citi Institute Podcast, host Alex Miller is joined by Paul Goody, Head of Balance Sheet Strategy and In-Business Risk, Treasury, Citi and Karen Dynan, Professor of the Practice of Economics at Harvard University.
They explore how the “mortgage lock‑in” effect—where homeowners with low fixed‑rate mortgages are financially disincentivized to move when market rates are much higher—has become a widespread drag on U.S. household mobility, housing affordability, and economic opportunity.
Paul explains how rising rates have left banks holding large portfolios of low‑coupon mortgages while many borrowers feel “golden handcuffs,” unable to relocate for family, job, or schooling reasons without sharply higher payments.
Karen highlights how constrained geographic mobility can limit access to better jobs and schools, while reduced turnover contributes to thinner housing markets, sharp post‑pandemic price increases, and worsening affordability that particularly harms younger and less affluent would‑be first‑time buyers.
Both speakers stress the need to design any new mortgage products, so they are fair, transparent, and genuinely beneficial to households, drawing lessons from “affordable” mortgage innovations before the financial crisis that ultimately produced poor outcomes for many borrowers.
Link to the Citi GPS report Moving America - https://on.citi/GPS_Moving_America_pdf
Link to Citi Institute - https://www.citigroup.com/global/insights/citi-institute
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