Across Oakland, Wayne, and Macomb counties, a low mortgage rate has quietly become one of the hardest things to split in a divorce. Here’s why — and what Michigan law actually allows.
Picture a couple in Royal Oak who bought their house in the spring of 2021. They got a 30-year fixed mortgage at a hair under 3 percent — the kind of rate that, at the time, felt almost too good to pass up. Four years later, the marriage is over. They’ve agreed on that part. What they can’t agree on — what they genuinely can’t solve — is the house.
(That couple is an illustration, not a specific client. But the bind is real, and family law lawyers across metro Detroit are seeing more of it.)
To keep the home, one of them has to refinance alone — at more than double the rate they’re paying now. On a single income, the new payment may not even be affordable, and the bank may not approve it. Selling isn’t much better: they’d both walk away from that 3 percent loan and step into a market where the next house costs more and the inventory is thin. So they do the thing that would have sounded absurd a decade ago. They stay. Same address. Separate lives. Divorced on paper, roommates in practice.
The “lock-in effect,” explained
Economists have a name for what’s happening here: the lock-in effect. When the rate on your current mortgage is far below what a new loan would cost, moving stops making financial sense — so you don’t. You stay locked into the house and into the loan.
The scale of it is striking. Researchers at the Federal Housing Finance Agency found that for every single percentage point today’s rates sit above the rate a homeowner already has, the odds of that person selling drop by 18.1 percent. Stack a few percentage points of gap on top of each other and the urge to sell all but disappears. The same FHFA research estimates the lock-in effect blocked roughly 1.72 million home sales nationwide between the second quarter of 2022 and the second quarter of 2024.
The gap driving all of this is enormous. The 30-year fixed mortgage averaged 2.96 percent across all of 2021 — an all-time low. As of June 11, 2026, the same loan runs 6.52 percent, according to the Freddie Mac Primary Mortgage Market Survey. A household sitting on a sub-3 percent loan isn’t giving it up without a very good reason, and plenty of people won’t give it up at all. In a June 2025 Bankrate survey of 1,198 U.S. homeowners conducted by YouGov, 54 percent said there’s no mortgage rate at which they’d feel comfortable selling this year — up 12 points from the year before.
You can see how strong the pull is when researchers ask people a simple hypothetical: what if you could take your current rate with you? The Federal Reserve Bank of New York did exactly that in a February 2024 survey. Homeowners with mortgages said that if they could keep their existing rate, their likelihood of moving jumped by 7.4 percentage points on average. For owners holding rates below 3 percent, the effect was dramatic — their stated probability of moving rose from 17.2 percent to 27.7 percent, a 61 percent jump, purely on the promise of keeping the rate. The rate isn’t a detail. For a lot of households, it’s the whole decision.
The market-wide footprint is just as telling. U.S. existing-home sales fell to 4.09 million in 2023 — the lowest in 28 years, according to the National Association of Realtors. When sales dry up completely, it’s not because people stopped wanting to move. It’s because the cost of moving, measured in lost interest rate, finally got too high.
When the math reaches into a marriage
For most people, the lock-in effect just means they stay in a house they’d otherwise sell. For a divorcing couple, it means something heavier. The house isn’t just an asset to hold — it’s an asset two people have to divide, and the cheapest way to divide it (sell, split the proceeds, go your separate ways) is exactly the move the rate environment punishes most.
There’s survey data pointing right at this. A May 2025 survey commissioned by Redfin and conducted by Ipsos, fielded to more than 4,000 U.S. homeowners and renters, found that among Americans who struggle to afford their housing payments, 2.8 percent said they postponed a divorce or separation — presumably because they were unable to afford housing on their own. It’s a small slice, and worth reading carefully: that 2.8 percent describes people already struggling with housing costs, not the population at large. But it puts a number on something family lawyers have been describing anecdotally for a couple of years now — couples who are done, but financially stuck.
And the cliff on the other side of a divorce is steep. A separate Redfin survey from November 2025 found that 64 percent of single Americans struggle to afford their housing payments, compared with 39 percent of married couples. Two incomes splitting into two households doesn’t just double the rent — it removes the very partnership that made the housing affordable in the first place.
Why metro Detroit feels it acutely
None of this is unique to Michigan. But a few local facts sharpen it.
Start with prices. In May 2026, the median home sale price in Oakland County was $385,000, up 2.7 percent year-over-year, according to RE/MAX of Southeastern Michigan. Macomb County’s median ran $285,000, up 3.6 percent. Wayne County’s was $227,700, up 3.5 percent. Those aren’t pandemic-era bargains anymore — they’re the numbers a single spouse would have to finance alone to keep the family home, or match to buy a new one.
Then there’s supply. The Michigan State Housing Development Authority has put the state’s housing shortage at roughly 119,000 units. For a spouse trying to move out and land somewhere stable, that shortage is the difference between options and ultimatums. Fewer homes, higher prices, and — after a divorce — one income to carry it.
The divorce numbers themselves tell a quieter version of the same story. Michigan recorded 20,491 divorces in 2023 at a rate of 4.1 per 1,000 people, among the lowest in the state’s recorded history, according to the Michigan Department of Health and Human Services. In the three core metro Detroit counties that year, the state logged 2,317 divorces in Oakland, 2,159 in Wayne, and 1,453 in Macomb. The long decline in divorce has many causes and predates the rate spike — no one should claim mortgages alone bent that curve. But for homeowners specifically, the financial barrier to actually finishing a divorce that requires selling or buying out a home is real, documented, and getting harder to ignore.
What Michigan law actually says about the house
This is where a lot of couples get tripped up, because the rules are less intuitive than they seem.
Michigan is an equitable-distribution state. Under MCL 552.19, a court divides marital property to reach a fair result, which is not always a straight 50/50 split. The equity that builds up in a marital home during the marriage is a marital asset, and it’s on the table in the divorce. The Michigan Court of Appeals put it plainly in Azar v. Azar (2007): equity accruing in a marital home over the course of a marriage is subject to division in the judgment of divorce.
So how does one spouse actually keep the house? Usually, through a buyout, one party keeps the home and compensates the other for their share of the equity. And here’s the trap that surprises people: getting your ex’s name off the deed is not the same as getting it off the mortgage.
A judgment of divorce can transfer the title, and a quitclaim deed filed with the Register of Deeds removes the departing spouse’s name from ownership. But the mortgage is a separate contract with the lender. Removing someone from the deed does nothing to the loan. The only clean way to take a spouse off the mortgage — and off the hook for the debt — is a full refinance. At 6.52 percent, on one income, that refinance is exactly the thing many households can’t afford or can’t qualify for. The result is a standoff: the spouse leaving wants off the loan; the spouse staying can’t refinance without blowing up the low rate or failing to qualify at all.
There is one federal provision that helps, at least partway. The Garn-St. Germain Act of 1982 bars a lender from calling a loan due simply because a home transfers to a spouse in a divorce. In plain terms, the spouse keeping the house can often assume the existing low-rate mortgage rather than refinance into today’s rates. That can preserve the 3 percent loan that started this whole problem. What it doesn’t automatically do is release the other spouse from liability — a point worth working through carefully with a lawyer and lender before anyone counts on it.
When a clean buyout or sale isn’t possible, Michigan courts have broad discretion to get creative — ordering a deferred sale, a delayed buyout, or a period of continued co-ownership. Those arrangements aren’t the default, and they don’t happen on their own. A party has to ask for them, and they need to be written carefully, because two exes co-owning a home after divorce is a contract waiting to be tested.
How a buyout actually comes together
It helps to walk through the moving parts, because a home buyout in a high-rate market is really three separate problems wearing one coat.
First, the equity. The spouses (or the court) have to agree on what the home is worth and how much equity has been built up during the marriage — that figure is the marital asset being divided under MCL 552.19. Second, the title. The judgment of divorce and a quitclaim deed move ownership to the spouse keeping the house. Third, and hardest, the debt. The mortgage stays exactly as it was until somebody refinances or formally assumes it. Solve the first two and skip the third, and the spouse who moved out is still legally on the loan for a house they no longer own.
In a normal-rate market, the answer is easy: refinance, pull out enough cash to fund the buyout, put the loan in one name, done. Today, that same move can turn a comfortable 3 percent payment into a punishing one — or fail outright when a single income can’t carry the new loan. That’s why the Garn-St. Germain assumption route has gone from a legal footnote to a genuine strategy. Keeping the existing loan in place, rather than refinancing it away, is sometimes the only version of the deal that pencils out. It also raises questions a lender has to answer in writing, which is precisely why this isn’t a do-it-yourself project.
A lawyer’s view from inside the cases
“The piece people miss is that staying on the deed and staying on the mortgage are two different things,” said Madana Hermiz, a divorce attorney at Hermiz Law in Troy. “A quitclaim deed can take your name off the title, but it doesn’t take you off the loan — only a refinance does that, and right now a lot of people can’t refinance at a rate they can live with.”
“We’re seeing more couples weigh deferred sales or shared ownership just to hold onto a rate. Sometimes that’s the smart move. But those deals have to be structured carefully, in writing, before anyone moves out. The worst version of this is two people improvising a co-ownership arrangement on a handshake and finding out two years later that nobody agreed on what happens next.”
If you’re in this position
As long as rates stay where they are, this won’t resolve itself. The 30-year fixed was still 6.52 percent as of June 11, 2026, and nothing about the metro Detroit market — prices up across all three counties, inventory short — makes the separate-households math easier this year than last.
If you’re weighing a divorce and a mortgage at the same time, the practical advice is straightforward: before you agree to anything about the house, talk to someone who understands how equity buyouts, deferred-sale arrangements, and mortgage assumption rights actually work in Michigan. The difference between a deal that protects you and one that quietly leaves you liable for a loan on a house you no longer own can come down to a single clause.
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