This time last year, homes were flying off the market. Now? It’s a much different story.
For the fourth time in the last five months, median home prices in Greater Boston fell in April. Sales volume declined too, in what is typically a season of escalating home sales, a sign of how sharply the rise in mortgage interest rates has spooked potential homebuyers and sellers alike.
The median-priced single-family home in the region sold for $820,000 last month, down roughly 3 percent from $845,000 at the same time last year, according to figures out Tuesday from the Greater Boston Association of Realtors. The median condominium price fell too, to $710,000, just under a one percent drop from April 2022.
“The market has been rather uneven so far this spring, with buyer activity rising and falling from week-to-week based on the timing of new listings coming to market, fluctuations in mortgage rates, and even the weather,” said GBAR President Alison Socha, an agent with Leading Edge Real Estate in Melrose. “The biggest challenges remain the lack of inventory and the reluctance of homeowners to sell and give up their low interest mortgage.”
Home sales dropped off even faster. Only 667 single-family homes sold last month in GBAR’s coverage area, which includes most of Greater Boston except a number of communities on the North and South Shores, 25.9 percent fewer than the 900 that sold last year, according to GBAR. The 697 condo sales reflected a 33 percent drop from 2022.
Statewide, the trends were the same. The median price of a single family home in Massachusetts dropped 1.2 percent in April year-over-year, and sales for the month were down by more than 25 percent, according to real estate analytics firm The Warren Group.
To be sure, the housing market was in overdrive at this time last year. Homes were going off the market in days, prices hit record highs, and buyers battled to outbid one another with all cash offers. So it’s not shocking that the numbers are down from that point.
But still, spring is typically the busiest time of year in Boston’s housing market, and after a rocky few months it appeared in March that the market may have been sputtering back to life, with prices up year-over-year. April’s declines tell a different story.
Would-be sellers still don’t want to sell, because in many cases, they don’t want to give up the low mortgage rate they have locked in on their current place. And that leaves buyers with little to choose from, even if they are still willing to take on a higher monthly mortgage payment. That dynamic is made obvious by how few new listings are going up.
New single-family home listings were down 31.3 percent in April from the same month last year, and new condominium listings were down 24.9 percent, according to GBAR.
Most would-be sellers currently hold a mortgage with an interest rate somewhere between 2 and 3 percent, less than half what they’d pay now. Last week, the average on a 30-year fixed-rate mortgage was 6.35 percent, according to Freddie Mac. That translates into a monthly payment on the median-priced house that’s almost $1,000 higher than it was a year ago.
That dynamic also explains why condominium sales are so far down. With so few single-family homes available, condo owners don’t have many options to upgrade. So instead they stay put, keeping their properties off the market and reducing options for would-be buyers.
“Buyers still outnumber listings in many communities so multiple offers remain quite common, but bidding wars are much more rare,” said Socha. “Sellers also have become increasingly more conservative on price when listing their home for sale. As a result, we’re not seeing a rapid run up in prices at the moment, though they remain not far from their peak.”
Andrew Brinker can be reached at firstname.lastname@example.org. Follow him on Twitter at @andrewnbrinker.