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‘Stalemate’: Sellers aren’t selling, and buyers aren’t buying. Rising interest rates are locking up Boston’s housing market.

Nearly everyone who currently holds a 30-year fixed mortgage has an interest rate lower than they could get today. So why sell?

Josh Stein outside his home in Newton, which he bought with Katherine Pocius in 2019.Nathan Klima for The Boston Globe

At a time when so many are struggling to find an affordable place to live, Josh Stein and Katherine Pocius know they’re luckier than most. But the predicament they find themselves in now may still help explain why fewer homes are changing hands, and why the housing market has gone stagnant.

The couple, both in their 30s, bought a three-bedroom Colonial in Newton for $1.1 million — their first home — in 2019. During the pandemic, one of those bedrooms became a permanent office, and now Pocius is pregnant with their second child, so they need more space.

But nothing they see on the market right now makes sense for them: homes are either too expensive or too small, and, given the runup in interest rates over the last 16 months, any new mortgage would cost them significantly more per month than they pay now.


So instead of moving, the couple has resolved to stay put and add a fourth bedroom. It’ll be a costly renovation but far cheaper in the long run than moving.

“We sat down and did the math, and this option, doing the renovation, is a lot cheaper for us than moving at this point,” Stein said. “A new place would have us paying a lot more than we’re willing or able to pay.”

In a housing market as high-strung as Greater Boston’s, of course, owning a three-bedroom in Newton is a relatively fortunate place to be. But the fact that Stein and Pocius feel like they can’t move speaks to a thorny dynamic that is jamming up the housing market: The rapid rise in interest rates has forced homeowners who were entertaining a possible move to reconsider, meaning fewer homes are coming on the market and causing what some economists have called a stalemate.

Would-be sellers are waiting on interest rates to recede. Ready buyers don’t have much to choose from because owners aren’t selling, or are themselves balking at the increase in interest rates. And so they keep renting, ratcheting up pressure on the region’s limited supply of apartments.


“We’re in a waiting game,” said Chris LeBarton, a director of market analytics at real estate data firm CoStar. “But waiting isn’t going to take the knees out of sellers. If someone has bought in this market before, they’re not waiting to sell because they can’t afford the current prices. They’re waiting because it makes better financial sense.”

Interest rates have been near historic lows for much of the last decade and dipped below 3 percent in the second half of 2020 and most of 2021. Most people who owned a home in that span either bought or refinanced into low-interest-rate mortgages.

But since the end of 2021, rates have surged, with the national average on a 30-year-fixed rate mortgage now sitting at 6.65 percent, according to Freddie Mac. That’s higher than the rates paid on 99 percent of current 30-year mortgages, according to a recent analysis by Goldman Sachs.

So for many, the numbers just don’t make sense right now. Take Stein and Pocius. After refinancing a few years back, their mortgage rate today sits just below 3 percent. Even if they bought a house for the same price, a new mortgage right now would mean paying about $1,000 more every month.


“That’s untenable,” Stein said.

And that means their house won’t go on the market anytime soon for some other young family to buy.

Alison Socha, president of the Greater Boston Realtors Association and an agent with Leading Edge Real Estate in Melrose, said she’s heard that story over and over in the past six months or so. And that, in part at least, helps explain why home sales and prices have been dropping recently.

The median-priced single-family home here sold for $707,250 last month, a 2.4 percent decline from the same time last year, and overall home sales in January were at their lowest point since 2009, dropping 33 percent from 2022.

The biggest test of how dramatically interest rates have cooled the housing market will be the spring, which is typically the busiest homebuying season of the year. There were signs in January that more sellers were tentatively willing to test the market — 649 homes were newly listed that month, a 1.7 percent increase from the same time last year — but whether that trend continues remains to be seen.

“There’s naturally a certain amount of slowing down in the market around this time of year, but that’s not what this is,” Socha said. “The trickiest part is that a lot of sellers aren’t selling because there’s nothing on the market for them to buy in return.”

Josh Stein in his Newton home.Nathan Klima for The Boston Globe

And while dropping home prices may sound positive (they are, for the lucky few who can find something right now), the current situation in the housing market is largely making things more difficult for everyone.


When homeowners don’t sell as they normally would, it means renters who have saved up enough money to buy are left with little to choose from. So they keep renting, taking up precious units and keeping the vacancy rate low and prices high. Data from the rental website BostonPads indicate that the region’s rental vacancy rate last week was 0.5 percent, well below the rate that’s considered typical of a healthy housing market.

“We already don’t have nearly enough housing,” said Melvin Vieira Jr., a real estate agent at RE/MAX Destiny in Jamaica Plain. “So when homes stop changing hands, it jams things up. We need sellers to sell and buyers to buy so that renters can have an easier go.”

So how do we get out of this? There’s really only one way, Vieira Jr. said.

“The only real relief we’ll see from this issue is when interest rates decline again,” he said. “And who knows when that will be.”

Andrew Brinker can be reached at Follow him @andrewnbrinker.