Massachusetts Home Buyer Guide

Massachusetts home buyers and home buyers around the United States still have the opportunity to take advantage of historically low mortgage interest rates. In fact, interest rates are a bit lower than they were a few weeks ago.  

The average rate for a 30-year, fixed rate mortgage loan in the U.S. declined .07 points last week to 3.70 percent, the lowest level in more than a month, the Mortgage Bankers Association (MBA) reported March 6, 2013. 

March has arrived, and we'll move the clocks forward an hour next week. It sounds like warmer temperatures and longer days are around the corner, but Massachusetts home buyers are wondering whether the spring real estate market will ever arrive.

The number of Massachusetts homes for sale has continued to decline over the past year. As of January 31, 2013, the inventory of single-family homes in the Bay State decreased 27.3 percent compared to January 2012, the Massachusetts Association of Realtors reported February 26, 2013.

Home to a diverse population, including many students attending several local universities, such as Harvard and Massachusetts Institute of Technology (MIT), and professionals in a myriad of fields and of various ages, Cambridge, Massachusetts is a much sought-after place to live in the Bay State.

Through the many unique communities, both residential and urban, its rich historical influences, and booming professional and cultural sectors, Cambridge, MA real estate, including single-family homes and condominiums, attracts individuals from many walks of life.

Cambridge has a vibrant history, giving residents a cultural experience that is unique from many other places in the country. Founded in 1630, Cambridge was originally named Newe Towne and settled by Puritan colonists under John Winthrop's leadership. Due to many prominent settlers and leaders in the area being graduates from England’s Cambridge University, the name of the city was changed to Cambridge in 1638.

Despite the lack of inventory, Massachusetts home buyers continue their quest for homes. 

Both single-family home sales and median price increased in January compared to January 2012, the Massachusetts Association of Realtors reported February 26, 2013.

Massachusetts real estate prices have increased four straight months, and single-family home sales have shown positive results in 19 straight months.

Brookline, Massachusetts home buyers took part in a real estate market that saw sales increase for both single-family homes and condominiums in 2012.

Single-family home sales increased 7.5 percent in 2012 on 172 sold properties, up from 160 sales in 2011. The median price of a single-family home in Brookline was $1,247,250 in 2012. The median price increased 3.5 percent from $1,205,000 in 2011. The most expensive home sold in 2012 set someone back a cool $10,500,000, more than double the most expensive home sold in 2011 ($4,900,000). 

Sales of existing homes in the United States increased 0.4 percent in January while the supply of homes on the market declined to its lowest level in 13 years, Reuters reported February 21, 2012. 

The National Association of Realtors provided the data. 

January was the second highest rate of sales since November 2009 when the federal home buyer tax credit was set to expire.

Massachusetts isn't the only state where the real estate market has perked up.

Overall, it doesn't appear the New Hampshire real estate market has turned the corner as fast as the Bay State, but New Hampshire home buyers drove residential home sales up 21.2 percent in January compared to January 2012, the New Hampshire Business Review reported February 21, 2013. 

The New Hampshire Association of Realtors provided the data, which also showed that median home prices decreased 2.7 percent despite the jump in sales. 

There were 800 residential NH home sales in January, up from 660 sold in January 2012; however, the 800 unit sales were 23 percent lower than the 1,037 units sold in December 2012.

For those Massachusetts home buyers that have benefited or will benefit from purchasing a home at prices at or near the bottom of the real estate market, they may have to share their good fortune with the Commonwealth of Massachusetts, if a proposal by Governor Deval Patrick is enacted by the legislature.    

As part of a package of tax increases and the elimination of a variety of tax breaks, Governor Patrick hopes to raise $1.9 billion annually in revenue. One proposal is to eliminate the capital gains tax exemption on home sales.

Presently, Massachusetts follows federal tax law in exempting up to $500,000 in capital gains on the sale of homeowners primary residence. Governor Patrick's proposal to the eliminate capital gains exemption is in conjunction with raising the income tax from 5.25 percent to 6.25 percent, effectively raising the capital gains rate to 6.25 percent.  

For example, if a homeowner sells a home after livng in it for a number of years for a gain of $200,000, that homeowner will have $12,500 in tax liability. 

So how much house could you afford, if you ditched your $1,825 per month rent payment for a mortgage? Property taxes vary from town to town, and so do condo fees, but home buyers could probably afford about a $300,000 single-family home or condominium for $1,825 per month, give or take about $15,000.

Using today's interest rates – about 3.5 percent – you can calculate the cost of principal and interest on our simple mortgage calculator.

The Boston Businnes Journal reported February 8, 2013 that one sector of the economy is great. That's Boston's rental housing market, and landloards in the Greater Boston Area are making a killing. 

In an effort to help affordable housing owners reduce costs and make their properties more energy efficient, the Massachusetts Housing Partnership (MHP) announced January 18, 2013 a new loan program to help its borrowers make energy improvements in their homes.