The median price of a Massachusetts single-family home averaged 6 percent growth each month during the final six months of 2022, slowing from an average 11 percent increase per month on a year-over-year basis during the first six months.
The median house price rose nearly 9 percent to $575,000 last year compared to $530,000 in 2021, according to data compiled by the Massachusetts Association of Realtors (MAR). The median price in December was $535,000, only a 2 percent increase from $525,000 in December 2021. The median price of a single-family home five years ago, in 2017, was $377,000.
Single-family home sales plummeted 31 percent in December year over year, partly due to a lack of inventory. For the full year, sales fell 15 percent statewide to 48,450 from 57,231 in 2021.
There was a one-month supply of single-family inventory at the end of December, five months less than the six months generally considered needed for a balanced market between home buyers and sellers. New listings hitting the market also were down in December, dropping 27 percent.
Condominium Prices Slipped in December 2022
The median price of a Massachusetts condominium was $435,800 in December, down slightly more than 1 percent compared to $460,000 in December 2021. Condominium prices in 2022 rose 7 percent to $501,000 from $470,000 in 2021. The median condo price five years ago, in 2017, was $350,000.
Homebuyers purchased 35 percent fewer condominiums (1,381) in December compared to the 2,117 units sold in December 2021. Condo sales fell 20 percent for the entire year to 20,686 from 25,772 in 2021.
There were about five weeks of condominium inventory at the end of December, a slight increase year over year. The number of units available for sale declined 17 percent to less than 2,000 statewide. New listings hitting the market also were down in December, dropping 27 percent.
Lower Interest Rates Improve Affordability
On a month-to-month basis, single-family homes were 7 percent, and condominiums were 11 percent more affordable in December than in November, according to the MAR Housing Affordability Index. The Index measures affordability based on interest rates, median sales prices, and average income by county. Mortgage interest rates retreated from their highs earlier in 2022, making homes more affordable in December. Compared to December 2021, when interest rates were much lower, houses were 25 percent less affordable, and condos were 22 percent less affordable.
Freddie Mac reported that mortgage interest rates decreased again for the week ending Thursday, January 26, 2023, to 6.13 percent for the 30-year, fixed-rate mortgage loan. The 30-year note broke 7 percent at the end of October for the first time since April 2002. Since then, interest rates have trended lower.