Massachusetts Home Buyer Guide

Massachusetts home prices rose modestly in 2023 as price growth slowed compared to the previous three years, and sales plummeted, according to data compiled by the Massachusetts Association of Realtors (MAR).

Scarce inventory remains a frustration for prospective home buyers, but lower interest rates have made homes the most affordable, relatively speaking, since the winter of 2023. 

Single-family Homes Prices Up, Sales Down 

The median price of a single-family home increased 5 percent in 2023 to $600,000 statewide compared to $571,810 in 2022. The median house price rose 7 percent in December to $567,500 from $530,982 in December 2022.

While up 5 percent last year, single-family price growth has slowed. In 2022, the median price rose 9 percent; in 2021, the median price rose 15 percent. Prices climbed 11 percent in 2020. Since 2018, the median house price has increased 51 percent.

Massachusetts saw 38,115 houses sold last year, a 21 percent drop from 48,243 in 2022. Home buyers purchased 2,903 single-family homes, or 21 percent less than the 3,677 in December 2022.

Home buyers in Greater Boston paid significantly more for homes last month and last year.

In the 64 cities and towns that comprise the Greater Boston Association of Realtors (GBAR) jurisdiction, the median price of a single-family home reached $845,000, a 6 percent increase from $800,500 in 2022. The median house price was $800,000 in December, up 8 percent from $740,000 in December 2022.

GBAR reported sales fell more than 22 percent in 2023 and nearly 25 percent in December. The 682 houses sold in December were the fewest for the month since tracking began in 2003.

Condo Prices Rise in December, Sales Fall

MAR reported that the median condo price in Massachusetts jumped more than 15 percent in December to $525,000 from $455,000 in December 2022. In 2023, condominium prices rose 6 percent to $530,000.

Median prices increased 7 percent in 2022 and 12 percent in 2021. Condo prices rose 7 in 2020. Since 2018, condominium prices have increased 41 percent.

Home buyers purchased 17,075 condos in 2023, a 17 percent decline from the 20,651 units sold in 2022. Sales fell nearly 17 percent last month, with 1,172 sales compared to 1,404 in December 2022.

GBAR reported the median condo price in Greater Boston rose 6 percent to $700,000 from $660,000 in 2022. The median price in December was $697,000, up 14 percent.

Real Estate Inventory Remains Tight

Prospective home buyers had 3,500 single-family homes to choose from statewide at the end of December, a nearly 32 percent decline year-over-year. The supply of inventory was around one month, well below the five to six months considered a balanced market between home buyers and sellers.

Condo inventory dropped 29 percent to 1,748 available units compared to 2,452 in December 2022. There were about five weeks of inventory on the market in December. 

Lower Interest Rates May Increase Demand

The Mortgage News Daily (MND) Rate Index stood at 6.77 percent after rising eight basis points on January 16, 2024. Rates hit 8.03 percent on October 19, 2023, before declining over the last few months. MND reported a 6.61 percent interest rate on December 27, 2023.

While declining interest rates improve affordability – MAR's Housing Affordability Index indicated homes in December were the most affordable since March 2023 – lower rates are likely to bring more prospective home buyers off the sidelines.

More competition for homes may push prices higher and inventory lower. These conditions could make it challenging for prospective buyers to find a suitable home at a price they can afford. Home buyers need to understand the their local market and be prepared to act quickly in a highly competitive environment.