Housing Sales Tracking Closely With Low 2023 Levels

Colin A. Young |SHNS

Three-quarters of the way through 2024, the year is shaping up to be just about as dismal for prospective homebuyers in Massachusetts as 2023 was.

Last year ended with the lowest volume of single-family home sales in 12 years and persistently high prices, both of which contribute mightily to the affordability and access problem that Massachusetts is now trying to address. Data for 2024 through September show that sales this year are running half a percentage point ahead of last year's pace as prices continue to post records.

The Warren Group reported Wednesday that there were 3,482 single-family homes sold here last month, a 3.7 percent decline compared to September 2023. The month's median sale price was $600,000, a new high for any September and up 6.2 percent from a year before.

Cassidy Norton, associate publisher at The Warren Group, said September showed "a slight cooling in sales."

"Elevated interest rates and limited inventory are likely key factors slowing the pace of transactions, despite continued demand," Norton said. "At the same time, prices remain robust ... However, the rapid rise in prices appears to be flattening compared to previous years, signaling a potential shift in market dynamics."

High interest rates are still affecting would-be homebuyers, and potential sellers. Though rates have come down a bit, some prospective buyers still have to limit their options because it is more expensive to borrow money than it was in some recent years. And people who are locked in at a much lower mortgage rate are less likely to give that up by making their home available for sale.

As of Oct. 10, the average interest rate on a 30-year fixed-rate mortgage was 6.32 percent APR, according to data compiled by Freddie Mac. A year ago, the average interest rate was 7.57 percent, but three years ago it was 2.99 percent, Freddie Mac said.

Through the first nine months of 2024, there were 30,858 single-family home sales in Massachusetts, The Warren Group said, a 0.5 percent increase compared to the 30,708 sales in the first nine months of 2023. Meanwhile, the 2024-to-date median single-family home sale price has increased 8.3 percent over the same period to $617,500.

The high cost of housing is one of the major drivers of the state's consistently high cost of living, which stresses the workforce and economy. During a Greater Boston Chamber of Commerce forum last week, Massachusetts Technology Leadership Council CEO Sara Fraim highlighted how much extra weight housing carries when companies and workers can move more easily.

"It's got to be housing, like one, two and three," she said when chamber head James Rooney asked for one, two or three issue areas the state should tackle soonest. "It really does have to be housing, because if people can't afford to live here and they do have the option to go someplace else, they will."

Gov. Maura Healey and the Legislature hope a law passed and signed this summer will spur the production of about 45,000 new units and the preservation of 27,000 more. Massachusetts is expected to have a 220,000-plus housing unit shortage by 2030.

One exception to September's sales slump was the Greater Boston area.

The Warren Group said there were 1,665 single-family homes sold in the 139 municipalities inside Interstate-495 last month, a 2 percent increase over the 1,633 sales last September. Year-to-date sales are also up 2 percent in Greater Boston, at 15,174 so far in 2024 compared to 14,873 through September 2023.

Greater Boston's $770,000 median sales price is up 6.9 percent so far this year, The Warren Group said.

Once thought of as a homeownership option with lower barriers to entry, the condominium market cooled way down in September as high prices and high interest rates change the calculus for buyers.

"The Massachusetts condo market saw a significant slowdown in September, with just 1,490 transactions—a 10.7 percent decrease compared to last year," Norton said. "This marks the fewest number of condo sales for the month since September 2011. With median prices at record highs and interest rates remaining elevated, these factors are likely contributing to the drop in activity."

This year through September, there were 14,194 condo sales in Massachusetts, a 4.1 percent decrease from the first nine months of 2023 while the median sale price of $540,000 represents a 4.3 percent increase over last year.