Madison, NJ – February 26, 2026 – In an industry where commission depends on transactions, one Madison real estate agent regularly tells potential clients to stay put – advice that seems counterintuitive until examining the mathematics of low mortgage rates versus current market conditions.
Scott Spelker of The Spelker Team at Coldwell Banker Realty in Madison, New Jersey, estimates advising roughly one-quarter of homeowners who contact him that moving doesn’t make financial sense given their existing mortgage rates.
“I tell them, listen, just stay where you are. Just don’t give up that mortgage,” Spelker said. “And sellers say, ‘isn’t that bad for your business?’ And I’m like, yeah, but it’s honest.”
The Mortgage Rate Lock
The advice stems from analyzing how dramatically mortgage rates increased over the past three years. Many homeowners secured rates between 2.5% and 3.5% during the pandemic-era low-rate environment. Current rates hover around 6-6.5%, creating substantial payment increases for anyone trading up to a more expensive home.
“If you’re gonna trade up to a more expensive house, you’re gonna give up that 2.75% mortgage and take out a 6.25% mortgage,” Spelker explained. “So it’s gonna be a more expensive house and a more expensive financing option.”
The mathematics become particularly challenging for families seeking modest upgrades. A homeowner with a $500,000 mortgage at 3% pays approximately $2,108 monthly in principal and interest. Trading up to a $700,000 home at 6.5% results in a $4,429 monthly payment – more than double, despite the home costing just 40% more.
Who’s Actually Moving
Despite this rate-lock effect, Morris County continues seeing transaction activity from several categories:
Downsizers with Equity: Homeowners who’ve paid off or substantially paid down mortgages can purchase smaller properties with cash, eliminating mortgage rate concerns entirely.
Out-of-State Relocations: Families moving to lower-cost states or to second homes at the Jersey Shore represent another active segment.
Estate Sales: Properties entering the market through inheritance or estate settlement account for significant inventory in established neighborhoods like Madison’s Hill section.
Job Relocations: Despite remote work prevalence, job transfers still force some moves regardless of financial optimization.
What’s notably absent: the typical trade-up buyer who would upgrade from a starter home to a larger property to accommodate growing families. This category historically drove substantial market activity but now faces mathematical challenges that discourage moves.
The Alternative Strategy
For homeowners committed to moving despite rate considerations, Spelker offers an unconventional suggestion: retain the existing property as a rental.
“Or rent your house out even,” he said. “Most agents don’t tell people not to sell their house.”
This strategy allows homeowners to preserve low-rate mortgages while generating rental income that may cover or exceed monthly payments. The approach requires managing two properties temporarily and qualifying for a new mortgage without selling the existing home – challenges that eliminate many candidates – but for those who can execute it, the long-term wealth building potential outweighs the complexity.
Market Impact
The rate-lock phenomenon has contributed to inventory constraints across Northern New Jersey’s established suburbs. “In this part of Northern New Jersey, in particular Morris County, it’s still very much a seller’s market,” Spelker said. “There’s a lot of buyers, there’s not a ton of inventory.”
Properties that do reach the market often generate intense competition. “If it’s priced right, houses are going on on a Thursday, showings Thursday, Friday, Saturday, public open house on Sunday, maybe showings on Monday. By Tuesday, if there’s going to be multiple offers, which a lot of times there are, we’re looking at those offers,” Spelker explained.
Well-prepared listings in desirable locations regularly receive 10-15 offers, with winning bids frequently exceeding asking prices by 10-25%. This dynamic benefits sellers fortunate enough to be in the categories able to move, but frustrates buyers competing in constrained inventory conditions.
The Advice Philosophy
Spelker’s willingness to discourage transactions stems from a long-term relationship-building approach rather than maximizing short-term commission income.
“I think people will appreciate that honesty,” he said. “Think long and hard. If the situation is right and you want to move, then move. But I’m just giving advice like, man, just think long and hard before you give up that rate, because you’re not going to see rates like that probably ever again.”
This advice philosophy appears to generate rather than discourage business. The Spelker Team operates as one of Coldwell Banker Madison’s top-producing groups despite – or perhaps because of – regularly counseling against transactions that don’t serve clients’ interests.
Looking Forward
Whether mortgage rates return to pandemic-era lows remains uncertain. Federal Reserve policy, inflation dynamics, and bond market movements all influence mortgage rates in ways that resist confident prediction.
What seems clear: homeowners with sub-4% mortgages face genuine financial dilemmas when considering upgrades. The payment differential between existing low-rate mortgages and new higher-rate loans creates friction in the housing market that traditional economic analysis might not fully capture.
For real estate agents, Spelker’s approach suggests that long-term business development through honest advice may produce superior outcomes compared to maximizing transaction volume regardless of client fit. His willingness to counsel against sales hasn’t prevented business success – it may have enabled it by building trust with clients who eventually transact when circumstances align more favorably.
Scott Spelker brings 25 years of Wall Street foreign exchange trading experience to The Spelker Team at Coldwell Banker Realty in Madison, New Jersey. The team serves Madison, Chatham, Florham Park, Harding Township, Morris Plains, Morris Township, Morristown, and Summit.
