High interest rates are keeping the Greater Boston housing market down this spring

Sales and prices have both fallen since this time last year, while mortgage rates have roughly doubled.

People attend an open house in Dorchester in 2019.Pat Greenhouse/Globe Staff

Greater Boston’s housing market was soaring so high over the last two years, it had to cool down at some point. And now, it has.

The region’s housing market hit new lows in February, with the fewest single-family home sales seen in a single month since 2011, and the third straight month of year-over-year price declines, according to new figures out Tuesday from the Greater Boston Association of Realtors.

The cooldown is mostly thanks to interest rates, which have nearly doubled over the last year, meaning anyone taking out a mortgage to buy a new home now would have substantially higher monthly payments than they would have a year ago, for the same price house. Those rates have dissuaded would-be sellers from selling, leaving buyers with little to choose from and creating something of a housing market stalemate.

“Even though it’s a less competitive market than it was at this time a year ago, it’s no less challenging for buyers,” said Alison Socha, the president of GBAR and an agent with Leading Edge Real Estate in Melrose. “Today’s higher mortgage rates have led to reduced purchasing power, especially for first-time buyers. We’ve also seen fewer listings on the market ahead of the spring selling season this year as many prospective sellers have opted to stay put.”

Just 414 single-family homes were sold in the 64 cities and towns covered by GBAR in February, a 15.9 percent drop from the 492 sales recorded in February 2022. It was the ninth straight month of year-over-year sales declines, and the fewest homes sold in any month since 409 sales were recorded in February 2011.

As the spring housing market approaches, Greater Boston is seeing declines in both prices and volume of single-family home sales.Elaine Thompson/AP/file

And perhaps even more striking: the median price on a single-family home in Greater Boston fell to $700,000 last month, down 7.6 percent from $757,500, the median price in February 2022. It was the largest year-over-year price drop since October 2011.

“As mortgage rates have risen, the buyer pool has shrunk, so sellers can no longer be as aggressive on pricing, bidding wars have become less frequent, and buyers have more room for negotiation,” said Socha. “Currently there’s very little upward pressure on prices.”

And it’s easy to understand why.

The national average rate on a 30-year fixed-rate mortgage currently sits at 6.60 percent, according to Freddie Mac. That means a monthly payment on the median-priced house in Greater Boston is still almost $1,000 higher than it was on the same-priced house a year ago.

Those rates haven’t necessarily deterred buyers, who Socha said are already crowding open houses in hopes of securing a place, but they’ve discouraged most sellers from selling and taking a higher mortgage rate on whatever they buy next.

“Buyers are out in force, but sellers — unwilling to trade a low mortgage rate for today’s higher rate — are staying on the sidelines and that means inventory remains lower than normal for this time of year,” Orphe Divounguy, a senior economist at rental website Zillow, said in a statement.

That said, the spring market is around the corner, and real estate agents are still expecting activity to pick up dramatically. Active listings were already up roughly 30 percent last month over February 2022. Sales will increase again, although they may be muted slightly if interest rates remain high. And ultimately, thanks to the region’s housing supply shortage, prices will inevitably begin to rise again, though by how much remains to be seen.

“It almost doesn’t matter how expensive something is, and homes are a great example of that,” said Cassie Norton, associate publisher at The Warren Group, a local real estate data analysis firm. “If there’s not enough of it, it’s going to get more expensive.”