Home Buyers Struggle With Inventory, Prices, and Interest Rates

Home buyers bought the fewest single-family homes in Massachusetts in any September in 13 years due to low inventory, record high prices, and rising interest rates, The Warren Group reported on October 18, 2023.

Single-family home sales plunged 27 percent in September 2023 to 3,608 statewide compared to 4,908 in September 2022. Through the first three quarters of 2023, single-family home sales have fallen by more than 10,000 houses or 25 percent.

The median price of a single-family home rose 3 percent in September to $565,000, a record high for September.

Massachusetts condominium sales fell 13 percent in September to 1,668 compared to 1,907 in September 2022, according to The Warren Group, a provider of real estate data. Through September, condo sales have dropped 21 percent to 14,799 from 18,656 during the same nine months last year.

The median condo price increased 9 percent in September to $500,000, a record high for September.

Greater Boston Sees Fewer Sales, Higher Prices

Greater Boston – defined by The Warren Group as the 139 cities and towns within Interstate 495 – saw single-family sales fall by a more significant percentage in September, 30 percent. House sales fell 26 percent through September.

The median house price in Greater Boston increase to $705,000 in September, up by 3 percent compared to $682,500 in September 2022.

Condominium sales decreased 10 percent in Greater Boston in September and have fallen 20 percent through the first nine months of 2023.

The median condo price in Greater Boston rose 7 percent in September to $579,500 compared to $542,500 in September 2022. 

Limited Inventory Stifles Sales

The number of single-family homes for sale in Greater Boston, according to the Greater Boston Association of Realtors (GBAR), fell 21 percent to 1,439 in September from 1,812 in September 2022. The GBAR defines Greater Boston as the 64 cities and towns roughly inside and slightly outside Interstate 95.

Home buyers had fewer condominiums to choose from in September as well. Available condo units declined 14 percent to 1,873 compared to 2,178 in September 2022.

Interest Rates Rise 2 Percent in a Year

The average interest rate for the 30-year, fixed-rate mortgage loan in the United States stood at 7.88 percent at the close of business on Friday, October 27, 2023, according to the Mortgage New Daily Rate Index. 

Over the last year, the index has reported rates ranging from 5.99 percent (February 2, 2023) to 8.03 percent (October 19, 2023) for the 30-year note.