Despite Tight Inventory, Competition for Homes Eases a Bit

The competition for homes in Massachusetts appears to have eased a bit during the first 10 months of 2023 despite the decline in real estate inventory.

The number of single-family homes for sale has plummeted more than 25 percent from June through October on a year-over-year basis, according to data compiled by the Massachusetts Association of Realtors (MAR). There were 31 percent fewer houses available in October than in October 2022. Home buyers had 5,508 single-family dwellings to choose from at the end of October compared to 8,029 in October 2022. Five years ago, there were 15,441 houses for sale statewide in October 2018. 

From January through October 2022, home buyers paid, on average, 103 percent of the original list price for single-family homes but paid 101 percent during the same 10-month period this year. While home buyers still paid over the listing price on average, the percentage is down a bit, likely indicating fewer offers made on each home.

Condominium units for sale dropped 27 percent in October compared to October 2022, MAR reported on November 20, 2023. There were 2,741 condos on the market statewide at the end of October compared to 3,749 in October 2022. There were 4,602 units available in October 2018.

Home buyers paid, on average, 102 percent of the original list price for condominiums from January through October last year and 101 percent during the same timeframe this year. 

Scarce Inventory Drives Prices Higher

The median price of a single-family home reached $615,000 in October, nearly 13 percent higher than $545,000 in October 2022. Through October, the median price is up 4 percent to $600,000 from $576,000 during the first 10 months of 2022.

The median condo price rose 8 percent to $520,000 statewide from $482,000 in October 2022. From January through October, condominium prices increased 5 percent to $530,000 compared to $507,300 during the same period in 2022. 

Interest Rates Ease, Creating an Opportunity for Home Buyers

The 30-year, fixed-rate mortgage loan averaged 8.03 percent on the Mortgage News Daily Index, which tracks day-to-day movements in mortgage rates, on October 19, 2023. At the close of business on November 28, 2023, the 30-year note averaged 7.30 percent, nearly three-quarters of a percent lower.

It is crucial for home buyers, especially first-time buyers, to conduct thorough research on home loan programs. Although the average rates across the country exceed 7 percent, local borrowers with 20 percent down payments and exceptional credit scores have recently secured rates below 7 percent. So, checking for available options and choosing the loan program that best suits your financial situation is vital.

To obtain the best financing terms for your situation, home buyers should speak with a loan officer who has access to various loan products and is willing to patiently explain the pros and cons of each loan program, including first-time home buyer programs.