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Sales are down, and prices are leveling off: More signs of a downshift in Boston-area housing market

Data out Tuesday shows how the region’s housing market has shifted since spring thanks to high prices and rising interest rates.

A home in Barnstable. Recent data indicates home sale prices in Greater Boston may have finally peaked.John Tlumacki/Globe Staff

Home prices in Greater Boston are still at jaw-dropping heights, but the region’s housing market showed more signs of slowing in July.

New figures out Tuesday indicate that sky-high home sales prices and persistent inflation rates are discouraging people from buying a house, and that the market is slowly inching towards normalcy.

Just 1,380 single-family homes were sold in July, an 18.6 percent decline from the 1,696 sold in July 2021, according to a new report from the Greater Boston Association of Realtors. That represents the lowest number of single-family home sales in any July since 2011. Similarly, condominium sales dropped about 25 percent, from 1,452 units sold in July 2021 to 1,089 last month.

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The decrease in sales volume is attributable to the combination of high prices and climbing mortgage rates, which have prompted some buyers to call off their home search altogether, and others to search for lower price points in suburbs farther from the city. The national average rate on a 30-year-fixed mortgage currently sits at 5.2 percent, up from 2.9 percent this time last year, according to Freddie Mac. To a buyer who borrows $600,000, that extra 2.3 percentage points amounts to roughly $800 more each month in mortgage payments.

“At every level buyers are having to dig deeper into their pockets to purchase a home,” said GBAR President Melvin A. Vieira, Jr., an agent at RE/MAX Destiny in Boston. “They’re becoming more cautious and cost-conscious, so homes are taking longer to sell, and in many instances they are attracting less interest and more modest offers.”

And while home prices are still high, there are signs that costs may finally be on the decline, too.

Single-family home and condominium prices are up from this time last year, at $841,500 and $680,000, respectively. But both those figures are down from June, when the median sales price for a single-family home hit a whopping $899,950, and the rate of year-over-year increases — 6.7 percent for single-family homes — has slowed in recent months.

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All of this is to say that, the days of home bidding wars may finally be over. Buyers no longer need to offer hundreds of thousands of dollars over a home’s asking price. And properties are staying on the market for weeks before selling, not days. In fact, the latest numbers are a sign that, after a red-hot first half of the year, home prices in Greater Boston may finally have peaked.

“It’s a much different market now than when the year started. Sellers still hold the upper hand, but they no longer get to name their price and terms,” Vieira, Jr. said. “There’s a little more room for negotiation these days.”

It also indicates that the Greater Boston market may finally be catching up to the rest of the country. Nationwide, homebuyer competition and home sales have been falling for a few months, according to real estate website Redfin, and some of the hottest markets in the US have cooled off significantly.

Still, don’t expect a dramatic drop in prices anytime soon. The housing crisis persists, and as long as the region continues to produce less housing than is needed in the region, home values will stay strong.


Andrew Brinker can be reached at andrew.brinker@globe.com. Follow him on Twitter at @andrewnbrinker.