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Massachusetts Home Buyer Guide


Greater Boston Real Estate: Will Lack of Affordability Cool Market?

May 25, 2023 11:15:41 AM

Over the last decade, median home prices in Greater Boston and Massachusetts have steadily climbed, accelerating during the COVID-19 Pandemic due to increased demand and short supply.

Happy-Young-Woman-Working-On-Sofa-Searching-ListingsAs anyone who recently bought or is searching for a home in Greater Boston knows, it's depressingly expensive.

What, if anything, will reverse rising home prices?

A lack of affordability might be the answer. The MAR Housing Affordability Index measures how affordable a region's housing is to its consumers. The index is based on interest rates, median sales price, and average income by county. A high number means greater affordability.

For example, an index of 110 means the median household income is 110 percent of what is necessary to qualify for the median-priced home under prevailing rates.

In April, the index stood at 54 for single-family homes. In other words, the median income statewide was only 54 percent of what was needed to purchase a median-priced house. For condominiums, the index stood at 60. In April 2015 – the oldest available April data on the MAR website – the single-family affordability index was 127. The index was 135 for condominiums.

The Massachusetts Association of Realtors (MAR) reported on May 15, 2023, that the median sale price of a single-family home last month fell by $2,000 to $588,000 statewide compared to April 2022. Condominium median prices fell 2 percent to $530,000. In April 2015, the median house price was $325,000, and $305,000 for condos.

The Greater Boston Association of Realtors (GRAB), whose territory includes Boston and 63 cities and towns, reported a 3 percent decline in single-family homes, with a median price of $820,000 compared to $845,000 in April 2022. The median condo price declined to $710,000, a $5,000 dip year over year or less than 1 percent.

The question is whether April's slight decline in home prices is a temporary blip or the beginning of a trend. Stay tuned


Related: What's Behind Falling Home Sales in Massachusetts? 


Home-buying Help for First Responders and Teachers


bipartisan bill in Congress would establish a new, one-time-use home loan program under the Federal Housing Administration (FHA) for first responders and teachers to purchase their first home. The HELPER Act, modeled after the VA home loan program, would address housing affordability by "eliminating the upfront home purchase costs and the monthly mortgage insurance premium for those who serve our communities, including teachers, law enforcement officers, firefighters, paramedics, and emergency medical technicians," according to a press release.


Down Payment a Barrier to Home Ownership


Massachusetts first-time homebuyers have the fifth-highest down payment in the nation, according to data from various sources Boston Agent reported recently.

The average down payment for Massachusetts first-time homebuyers is $72,710.56, with a median home value of $559,312. Nationally, the average down payment is $43,870.93.

While it is difficult for prospective homebuyers to compete in the current real estate market with lower down payment amounts, homebuyers have financing options that allow for lower down payments.

A Handy Homebuyer Wants v. Needs Worksheet. Download Now. 

Topics: Real Estate Market, Massachusetts Home Prices, Massachusetts Association of Realtors


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