Glimmers of positive news in housing market
Both home sales and supply start to bounce back as the spring season gets underway
Is Greater Boston’s housing market finally starting to wake up? Not quite, but there are some early signs the market may finally start churning again.
Home sales ticked up slightly in February, with 457 single-family homes sold in the region, a nearly 9 percent increase from the 420 homes sold in February 2023, according to figures released Tuesday by the Greater Boston Association of Realtors.
It’s a small increase, and still well below the number of homes sold in February two years ago when the market was quite active, but there are other signs things may be improving as well. Singlefamily listings were up 36 percent in GBAR’s coverage area, which includes most of Greater Boston except for the North and South shores. Inventory was up 19 percent from the same time last year. Pending sales were up too.
It may be a sign that buyers and sellers are becoming more willing to stomach interest rates that, while down from recent peaks, are still much higher than they were a few years back. Or they’re becoming less patient.
“There’s a lot of pent-up demand that’s built up in the past 12 to 18 months, and most buyers appear serious and ready to buy,” said GBAR President Jared Wilk, a broker with Compass in Wellesley. “They’ve grown comfortable with where rates are at, but are tired of losing out on other offers, so they’re motivated and that’s led to more showings, increased foot traffic at open houses, and a higher volume of sales activity.”
The housing market in Greater Boston
has been practically frozen for the last two years, as both would-be buyers and sellers have recoiled from an inflation-driven surge in mortgage rates. Today, those rates are declining, albeit slowly. The average rate on a 30-year fixed-rate mortgage was 6.74 percent last week, a drop from late October when that rate nearly hit 8 percent, according to Freddie Mac.
Before rates began to rise in early 2022, they had been in a multidecade trough that meant the vast majority of home buyers were able to secure mortgages with relatively low monthly payments. In the same turn, the rise in in
‘There’s a lot of pent-up demand that’s built up in the past 12 to 18 months, and most buyers appear . . . ready to buy.’
JARED WILK, Greater Boston Association of Realtors
terest rates has pushed both buyers and sellers out of the market. Buyers, who already have to contend with sky-high home prices, haven’t been able or willing to stomach a larger monthly payment as well. And would-be sellers haven’t been willing to trade off the relatively low mortgage rates on their existing homes for a new home with a higher monthly payment.
The recent decline in rates has some buyers and sellers cautiously testing the market. Condominium sales were up 2 percent in February compared with the same month last year, according to GBAR.
Wilk is optimistic. If interest rates keep trending down, he said, “we’re poised to have the strongest spring market since 2021 provided we have more listings to meet the buyer demand.”
Statewide, the shift appears far less pronounced. The same number of homes were sold last month across the state as were sold in the same month in 2023, according to data from The Warren Group, a real estate analytics firm. Condominium sales ticked up 6 percent; 1,076 condos sold last month, compared with 1,017 in February 2023.
What has not changed is the seemingly endless upward march of home prices around here. The median-priced singlefamily home in Greater Boston sold for $785,000 last month, according to GBAR, up 12 percent from February 2023. The median-priced condo in the region sold for $689,950, up 8 percent from the same time last year. Both marks were new record highs for the month of February.
And while interest rates aren’t helping that trend, the housing shortage is ultimately to blame.
“A lack of inventory is the biggest factor driving these trends, and with fewer and fewer homes hitting the market, we can fully expect to see more record-setting prices paired with a low sales volume in the coming months,” said Cassidy Norton, The Warren Group’s associate publisher and media relations director.