Boston Real Estate for Sale
Loading...
When most of us begin searching for Boston real estate for sale, we naturally start by looking at the price. It’s important, however, to closely consider what else impacts the purchase of a downtown Boston condo. It’s not just the price of the condominium that matters, but the overall cost in the long run. Today, that’s largely impacted by low mortgage rates. Low rates are actually making homes more affordable now than at any time since 2016, and here’s why.
Today’s low mortgage rates are off-setting rising Boston condo for sale prices because it’s less expensive to borrow money. In essence, purchasing a home while mortgage rates are this low may save you significantly over the life of your home loan.
Taking a look at the graph below with data sourced from the National Association of Realtors (NAR), the higher the bars rise, the more affordable homes are. The orange bars represent the period of time when homes were most affordable, but that’s also reflective of when the housing bubble burst. At that time, distressed properties, like foreclosures and short sales, dominated the market. That’s a drastically different environment than what we have in the housing market now.
The green bar represents today’s market. It shows that homes truly are more affordable than they have been in years, and much more so than they were in the normal market that led up to the housing crash. Low mortgage rates are a big differentiator driving this affordability.
What are the experts saying about real estate affordability?
Experts agree that this unique moment in time is making homes incredibly affordable for buyers.
Lawrence Yun, Chief Economist, NAR:
“Although housing prices have consistently moved higher, when the favorable mortgage rates are factored in, an overall home purchase was more affordable in 2020’s second quarter compared to one year ago.”
Bill Banfield, EVP of Capital Markets, Quicken Loans:
“No matter what you’re looking for, this is a great time to buy since the current low interest rates can stretch your spending power.”
“Those shopping for a home can afford 10 percent more home than they could have one year ago while keeping their monthly payment unchanged. This translates into nearly $32,000 more buying power.”
“Homeowners are the clear winners. Low mortgage rates mean the cost of owning is at historically low levels and who gains all the benefits of strong house price appreciation? Homeowners.”
Boston Real Estate and the Bottom Line
When purchasing a Beacon Hill home or a Boston high rise condo, it’s important to think about the overall cost, not just the price of the home. Seaport condos on your wish list may be more affordable today than you think. Let’s connect to discuss how affordability plays a role in our local market and your long-term homeownership goals.
Original Boston Real Estate Blog Post
Greater Boston Housing Report Card Shows City Is Less Affordable Than Ever. From B&T
Despite a value decline of 18 percent since the peak of the real estate market in 2005, housing in Greater Boston is less affordable than ever, and that significantly threatens the region’s economic future.
That was the conclusion of the 2009 Greater Boston Housing Report Card, prepared by the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern University, along with The Warren Group, publisher of Banker & Tradesman, and the Citizens Housing and Planning Association.
The article also states that:
“We’re still not in the situation where we are creating housing at all price points that combats the disadvantage in the region, and that’s a serious problem in the medium and long term,” Grogan said.
And by 2006, according to Bluestone, Greater Boston lost 6 percent of its population it had in 2000. People are leaving in search of a cheaper place to live.
Grogan said Boston’s major resource was intelligence: it’s the university and hospital capital of the country. But without enough affordable housing to both retain the talent that comes through the city, and to give local families and their children the opportunity to become that talent, Boston could find itself left behind in the 21st century economy.
“It really goes to the whole talent question: Will this region have the talent, the manpower to have a stable economy going forward?” Grogan said. “We absolutely need to have public policy that will allow people to stay, and let people to choose to stay.”
Read the full Boston real estate story
