Will there be a Boston condo buying surge?

Boston Condos for Sale and Apartments for Rent

Will there be a Boston condo buying surge?

Rates, pricing movement could be setting up a mortgage surge

Downward trends, potential interest rate cuts poised to boost affordability

Rates, Pricing Moves Could Be Setting Up Mortgage Surge

Boston condo for sale mortgage rates and prices have been moving in a promising direction for the local housing market, and could send activity sky-high.

The changes have already improved affordability in markets across the country and set off Boston condominium refinancing, which didn’t seem worthwhile in recent years after the surge in rates post-rising interest rates, Inman reported.

Housing affordability is at a six-month high, according to Intercontinental Exchange’s Andy Walden. Mortgage rates are down 1.5 percentage points from October’s peak and rates are expected to keep falling if the Federal Reserve cuts interest rates, as it has signaled it’ll likely do soon.

Mortgage rates for a 30-year fixed-rate mortgage are hovering around 6.5 percent. That means purchasing the average home requires 34 percent of median income.

But each reduction in rates by a quarter point brings down mortgage payments on the average home by roughly $60. If rates fall to 5.5 percent, the payment-to-income ratio would drop to 31 percent. That would also boost the number of homeowners “in the money” for a mortgage refinancing from 2.5 million to 7.2 million, ICE Mortgage estimates.

There’s also good news for consumers on the home price front, as price appreciation slowed to 3.6 percent in July, according to ICE Mortgage.

Don’t wait for a Boston real estate crash

Don’t expect the housing market to crash anytime soon.

Boston condos for sale and the Boston line

Nevertheless, affordability remains challenging in a majority of the nation’s 100 biggest markets including downtown Boston, according to ICE Mortgage, as monthly mortgage payments remain 10 percentage points above historical averages.

Peace be with you

Updated: Boston Real Estate Blog 2024