The U.S. housing market has been getting some action after mortgage rates inched down late this summer. The National Association of Realtors reported Monday that there was a 4% increase in pending home sales in August, with gains in the Midwest, South and West.

By no means does that equal a frenzy, though. There's a big factor that continues to keep the market in a holding pattern.

When mortgage rates came down, the excitement in the Twin Cities real estate market was modest.

“I was able to do a second showing for a buyer recently, which, you know, in the last number of years, that would have been a total luxury,” said Patti Jo Fitzpatrick, president of Minnesota Realtors. Her buyers got to see the property a whole two times before putting in an offer.

Fitzpatrick said there’s a smidge more inventory out there, thanks to the lower cost of borrowing.

But the other costs of owning a home have gone up. “So your energy costs, your insurance costs,” she said.

The Midwest saw the most gains from lower rates, said Lawrence Yun, chief economist at the National Association of Realtors.

“Americans are very concerned about affordability. So in markets where homes are affordable, they're more readily able to respond,” he said.

The average rate for a 30-year fixed mortgage is now 6.3% — way higher than what Julia Fonseca got when she bought a house.  

“My rate is 2.125 on a 15-year fixed, So that is pretty hard to give up still,” she said.

Fonseca, a finance professor at the University of Illinois at Urbana-Champaign, said roughly 80% of borrowers are in the same boat: If they bought the same house today, they’d pay way more. 

“These higher rates have really meaningfully deterred borrowers from moving,” she said.

Researchers like Fonesca and Kyle Mangum, a senior economist with the Philadelphia Fed, are still trying to understand what this new lock-in dynamic means for home prices and mobility, because for decades, rates were generally inching down. 

“My parents’ generation would talk about double digit mortgage rates, and really since then, it's been a long term downward trend,” Mangum said.

Now we’re in a new normal, where people are buying or selling their homes because they have to — for jobs, to downsize, as life happens.