Home sales fell by more than 10% year-over-year last month while November prices hit an all-time high, real estate market watchers say.
Sales of both single-family homes and condos dropped by an average of 10.5% when compared to 2022, and sales this year are down about 22% from last year, according to national real estate and transaction data provider the Warren Group.
At the same time, the median price for a single-family home jumped by 8.4% to $579,000 and the median condominium price climbed 5.3% to $500,000.
“Market conditions and trends remained relatively unchanged in November as limited inventory in Massachusetts pushed single-family prices to a new all-time high for the month and sales fell by more than 10 percent on a year-over-year basis,” Warren Group Associate Publisher Cassidy Norton said.
Last month, just 3,447 single-family homes sold in Massachusetts, down from more than 3,850 in 2022. That’s the smallest reported single-family home sales number seen since November of 2011, according to the Warren Group’s analysis. Condo sales slumped from 1,658 last November to 1,487 this year.
“Condo activity was nearly lockstep with single-family trends in November,” Norton said. “Condo sales were down by more than 10 percent on a year-over-year basis while median sale prices reached new all-time highs for the month.”
Housing market turmoil comes as mortgage rates retreat slightly from their October high of 7.79%, the highest they’ve been since late 2000. Last week, mortgage buyer Freddie Mac announced interest rates for a 30-year fixed rate mortgage had dipped to 6.95%.
High interest rates pushed by the Federal Reserve on their key rate are aimed towards tamping down inflation, but have resulted in a surge in mortgage costs. Mortgage rates rose above 6% last year along with 11 Fed rate hikes, and have remained there since, pushing some home buyers out of the market. Just two years ago, interest rates were closer to 3%.
Federal Reserve Chairman Jerome Powell has indicated the central bank may begin cutting rates in 2024, but according to the Warren Group, the tough housing market is unlikely to change anytime soon.
“I don’t expect the pressure building behind this pent-up demand to be relieved this year; I think we can expect to see more of the same in the coming months due to elevated interest rates. However, the Federal Reserve has indicated it intends to reduce interest rates in 2024, which may help relieve some of that pressure,” Norton said.
Gov. Maura Healey has said limited housing supply is the strongest headwind facing the Bay State, and has offered a $4 billion housing bond bill — the largest such investment in state history — as a means of solving the limited housing stock problem.
Healey’s plan has been sitting in neutral while the Legislature takes the end of the year off, but on Monday it got the backing of U.S. Sen. Elizabeth Warren, who said the situation will worsen without intervention.
“The problem is bad and the problem is getting worse,” Warren said. “Do you think that housing is in short supply in Massachusetts right now? Do you think that rents are already rising like a hot air balloon? Well buckle up for a rough ride.”
Herald wire services contributed to this report.
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