If you were waiting for the housing market to improve before looking for a new home, you may be stuck waiting for awhile.
The housing market in Greater Boston has been frozen for much of this year, and that trend continued in November, as both potential homebuyers and sellers continued to balk at prohibitive home prices and stubbornly high mortgage rates.
Just 784 single-family homes were sold across the region last month, the lowest for November in more than a decade, and a 13 percent drop from the same time last year, according to figures released Tuesday by the Greater Boston Association of Realtors. Condominium sales fell sharply as well: The 630 units sold last month in GBAR’s coverage area, which includes much of Greater Boston but excludes the north and south shores, was a 12.7 percent drop from November 2022.
“With mortgage rates reaching their highest level in more than 20 years, the inventory of homes and condos for sale still tight, and inflation and instability in the financial markets diminishing savings rates and creating uncertainty about the economy, many prospective buyers and sellers have either lacked the confidence or buying power to enter the housing market this fall,” said GBAR president Alison Socha, an agent with Leading Edge Real Estate in Melrose.
The same dynamics are playing out across Massachusetts. Through the first 11 months of the year, home sales were down 23 percent statewide compared to 2022, according to data from The Warren Group, a real estate analytics firm.
While it’s normal for home sales to dip in the fall and winter months, figures are currently running well below the typical pace for this time of year. And it doesn’t seem like that will let up anytime soon.
The housing market is trapped in something of a holding pattern by the rise of interest rates over the last two years. The average on a 30-year fixed-rate mortgage sat at 6.96 percent last week, according to Freddie Mac, a dip from a multidecade high set in October, but still more than double what they were two years ago.
Would-be sellers don’t want to sell because most homeowners have mortgage rates significantly lower than today’s average, meaning they’d absorb a higher monthly payment on a new home.
The prospect of higher monthly payments is forcing would-be buyers from the market as well, though there is still significant demand for homes because there is so little supply to choose from.
That imbalance between demand from buyers and supply from sellers does nothing to help Greater Boston’s home costs. Sale prices have receded slightly in recent months, which is to be expected at this time of year. But they are still high. The median price for a single-family home sold last month in GBAR’s coverage area was $800,000, down from a summer peak, but still up 5 percent from last November.
“Today’s slower sales pace doesn’t reflect actual demand however, as the number of millennials and Gen Xers in their prime homebuying years is substantial, as is the segment of baby boomers looking to right-size,” said Socha. “The buyer pool may be smaller at this time of year, but the reality is we still don’t have nearly enough listings to meet the demand, and that imbalance continues to put upward pressure on home prices.”