Massachusetts home prices overcame weakness early this year to edge higher as the second half of 2023 gets underway. Mortgage rates have doubled since early 2022, causing a decline in home prices nationally. Some areas of the US have seen double digit drops in home prices this year. But the rise in mortgage borrowing costs has failed to trigger broad-based price reductions in Massachusetts, much to the dismay of local home buyers.
MA home prices generally steady to rising
Laboring under the higher mortgage rates, the Bay State housing market got off to a slow start in 2023. However, recent renewed activity enabled MA home prices to turn broadly positive as the first half of 2023 came to a close.
MLS-PIN, the largest MLS serving Massachusetts, reports that the state’s median home sale price rose a modest 1.7% during the first six months of the year. But the rise, coming as it does against a backdrop of already record-high home prices throughout the state, should bolster confidence in the long-term prospects for real estate in Massachusetts.
Local markets have differing price performances in 2023
Like politics, real estate is very local. Price trends can vary region by region within a state and sometimes even municipality by municipality.
As reported on the Realtor Property Resource (RPR), median home values (not sale prices) have risen over the last twelve months in some areas of the Bay State, while drifting lower in others. According to RPR, the City of Boston saw median home values remain flat. Median home values have dropped in Cambridge, yet have risen sharply in Worcester. On a county by county basis, home values have experienced either minor plus or minus movements in the last year.
Mortgage rates soar since 2022
As tracked by Mortgage News Daily, average 30-year-fixed mortgage rates have more than doubled since the start of 2022. This massive increase in home buyers’ borrowing costs lies behind widely-reported housing market malaise in certain regions of the US this year. (Markets in the western half of the country reportedly have been especially hard hit.)
The fact that Massachusetts real estate has shrugged off these higher rates so far this year is extremely encouraging for Bay State home sellers!
Massachusetts remains a sellers’ market
2023 has seen the same dreary routine for many would-be home buyers in Massachusetts: scant housing supply, heavy turnout at open houses, and spirited bidding wars are still the norm in most areas of the state.
Just look at how few single-family homes were for sale on MLS-PIN this June! The appalling lack of supply for sale has bedeviled the Massachusetts housing market for years now. The dearth of listings has contributed mightily to the continuation of sky-high home prices in the Bay State this year.
Help for home buyers and sellers
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