What does seem to happen often is that an owner who wants to move but doesn't want to lose their nice rate will move and then rent our their old place, or at least try to, it can be difficult to qualify for a new mortgage while carrying the old mortgage and not having a history of rent payments.
There's some exceptions, USDA, VA, and FHA loans. All government programs. But it's tied to the property so only transferable to the purchaser. Very rare here even now with rates changing so much.
ARM, 5/1 may be assumable depending on terms.
Typically people refix after the term. My 5 year recently ended and my monthly cost increased as I’m now fixed at a higher rate for another 5 years - at 4.5%, although it’s still less %age of my wage than it was 5 years ago.
During the fixed term you can’t repay it without a penalty, but if you move house you can port the mortgage so it’s secured against the new house instead.
We got blown away by the pandemic that locked up the housing stock. So I cheated and built my own house for like 1/4 the cost it is on the market as it's almost all markup from the opportunity cost of losing the 0% loan.
For those that have lost hope seriously consider a prefab for like 60k dropped on some vacant land. Where I live you don't even need inspections or license to do it yourself. But you need to develop the land yourself, and not hire out a GC, because developers will always be chasing high margin luxury builds rather than the low margin methods I've discovered for economical housing.
Basically the poor have worse access to credit than other groups so when interest goes negative in real terms the poor pay for it.
For those of us here, that’s probably well within reason in most of the country where you can buy a house for <$600k
Sure the price of the houses has gone down, but higher interest rates mean my monthlies are higher than they were, which means I can't afford a house!