Home prices in Massachusetts hit record highs in August as limited inventory and higher mortgage rates continued their two-way squeeze on would be buyers.
According to data released today by The Warren Group, a Massachusetts real estate industry tracker, median sales prices of single family homes hit an all-time high in August at $600,000.
That’s up 6.2% from the year-ago median of $565,000.
At the same time, single-family sales numbers remain down more than 20% in year-over-year figures. August sales numbered 4,397, according to the Warren Group, down 23.6% from the 5,753 tallied a year ago. And year-to-date sales were 27,055, down from 35,787 over the same period a year ago.
“The hits keep coming for prospective homebuyers in Massachusetts,” said Cassidy Norton, Associate Publisher and Media Relations Director of The Warren Group. “The shrinking single-family inventory continues to push prices to new highs. Couple this with the fact that interest rates are nearly double where they were a year ago, and the homebuying process is becoming more complicated – and expensive – for buyers.”
Data from the Massachusetts Association of Realtors paints an even more expensive picture of what’s happening in the state. Sales figures compiled by MAR pegs the median price of a single-family in August at $630,000. The median condo sale price was up 9% at $545,000.
“As if the continued upward trend of median prices was not enough of a hurdle, mortgage rates hit a two-decade high in August,” said David McCarthy, 2023 president of MAR and REALTOR at Keller Williams. “If lack of inventory continues to keep prices high amidst a perfect storm of economic factors, market participation will be difficult to generate.”
MAR data showed an 11.7% decrease in single family home listings and a 0.4% increase in condo listings in August.
“As hopes for the nation’s housing market to rebalance increase for prospective buyers from coast to coast, this slow finish to the summer does not indicate any improvements on the horizon,” the organization said in a statement with its data release.
While mortgage rates ticked back from their August highs earlier in September, that short-lived trend reversed last week.
The average for a 30-year, fixed loan climbed to 7.18% from 7.12% a week earlier, Freddie Mac said in a statement Thursday.
Borrowing costs have hovered above 7% for the past five weeks, with the latest uptick further squeezing affordability. Roughly 60% of shoppers said they couldn’t find a home to buy due to limited offerings, according to a July survey from Realtor.com.
The run-up in rates has had a huge impact on the bottom line for home buyers. A borrower with a $600,000 loan would be paying $4,065 a month at current levels, up 56% from the start of 2022, when rates were near record lows and the same loan at 3.25% cost $2,611 per month.