Boston condo buyers can live with rates under 7%
Boston Condos for Sale and Apartments for Rent
Boston condo buyers can live with rates under 7%
If rates can slip into the high-5s by next month, the early-2024 Boston condo for sale market will be on fire….
Survey-based rate indices haven’t yet had time to account for the massive drop in mortgage rates this week, but rest assured, it was special. That’s no surprise if you saw our coverage yesterday, which pointed out that it was the biggest drop in a 45 day window that we’ve ever measured.
When rates drop that much, that quickly, there’s always some risk that we’ll see a corrective bounce. Sometimes such corrections only erase a small amount of the improvement over a day or two. Other times they can be the start of weeks of gradual increases. Either way, we usually have some indication of that resistance within a few days of the final crescendo.
This time, however, the mortgage rate drop is sticking the landing. Wednesday and Thursday were the big movement days and now today has seen almost no movement at all. The average lender is effectively right in line with yesterday afternoon’s latest levels.
While this turn of events can’t predict the future, it is a more reassuring set-up for the days and weeks ahead. Speaking of weeks, we probably won’t know what the next leg of this journey truly looks like until the 2nd week of January after the next Consumer Price Index (CPI) comes out.
Source: Mortgage daily news
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Boston condo buyers can live with rates under 7%
When Boston condo mortgage rates hit 6 percent in September, buyers were taken aback. Not since 2008 had rates been so high. But as rates soared past 7 percent, homebuyers’ perspectives changed.
Boston condo mortgage rates drop
So in the past two weeks, as the average rate on a 30-year, fixed-rate mortgage fell to 6.67 percent — down from a peak of 7.16 percent one month ago — agents began to see a spate of activity from prospective buyers.
mortgage rates doubled from last year
“It’s not like they’re getting a good rate still. It’s like double what they were a year ago,” said Mike Fabbri, an agent with Nest Seekers. “But there’s improvement. There’s confidence in the market and there’s just signs that things are getting better. And that’s when people start to flood the market.”
Boston condo mortgage rates on a roller-coaster
Agents say the roller-coaster that mortgage rates have been on for the past year has created a more savvy client base, one that knows when to enter the market and when to hold off. As mortgage rates dropped, mortgage loan applications — which had been slow for months — increased 2.2 percent on a seasonally adjusted basis in just a week, the Mortgage Bankers Association reported. Refinancings increased 2 percent.
“They’re watching it like people watch the stock market,” Compass agent Diana Sutherlin said. “And some of them are trying to play it like the stock market.”
Mortgage rates rose during an already tumultuous time for the housing market, which had run up because of frenzied buyers, cheap loans, a shortage of listings and other factors. There were a lot of “red flags,” said Erin Sykes, Nest Seekers’ chief economist and also an agent.
Even the congressional elections seemed to affect home shoppers.
“All people want is some amount of certainty,” Sykes said. “I had very few showing requests in the two weeks prior to midterms, and then the day after midterm elections, I had six showing requests come in.”
The rate drop came right after the elections, she noted.
Some agents interviewed for this story referred to the saying “Marry the house, date the rate,” meaning that at some point, buyers can expect to refinance at lower interest.
“Anybody who’s still in the market or who has entered the market since the late spring, they are continually coming to terms with the fact that rates are much higher, and they’ve decided they want to buy anyway,” Douglas Elliman agent Lindsay Barton Barrett said. “The people who are buying right now are buying with the understanding that the interest rate they get at closing is probably not the interest rate they’re going to have 10 years from now.”
