Are you curious about how the rising interest rates have impacted the Massachusetts housing market over the last 30 days? Today, we’re breaking it down and giving you a quick market recap of what's happened over the month of April. It's been a little bit of an interesting month as you've probably heard. If you've been paying attention to anything in the media, interest rates had their biggest two-week climb in the history of what we've been tracking for interest rates. A 30-year fixed loan is sitting above 5.5% percent for the first time in well over 10 years. A lot of people have asked us what does that mean for the housing market? Keep reading to get our thoughts!
Taking a Look at the Data
Let's dig into some of the numbers. Over the last 30 days, we've added 6,813 single-family listings to the inventory in the state of Massachusetts. It’s still a really healthy market overall. One of the areas where we would tend to see the biggest impact of the interest rate changes is in the number of listings that went under agreement. In April of 2022, 5,829 single-family homes went under agreement it's down slightly from 6,500 that went under agreement in April of 2021. We feel that is attributed to the lack of inventory coming on the market which is still lagging behind where it was in 2021, 2020, and 2019.
All signs still point to multiple offers, over asking bids, and a really strong housing market. One of the biggest indications of this can be found by looking at what happened to the average price of closed homes on May 1, 2021, versus May 1, 2022. That average price climbed from $625,000 on May 1, 2021, to $689,000 on May 1, 2022.
Experts believe that home prices will continue to grow through 2026, although not to the extreme that we’ve seen over the past year or so. The graph below from Keeping Current Matters depicts expert predictions for the next few years.
What Does This Mean for You?
Buyers are still out there looking for homes and even though interest rates are increasing, they're still putting in really strong offers. Now, one of the questions that you might be wondering is what is this going to mean for the future. We don't know for sure, however, we believe that we're going to head into all of May, June, and July with what is still a very strong housing market for both buyers and sellers. However, buyers might find that there's going to be some room for opportunity as homes are staying on the market slightly longer. Keep in mind that by slightly longer, we mean more than seven days which is kind of crazy to think about! However, when that starts to happen we might see that the percentage above asking where homes are selling is going to start to decrease a little bit. For sellers, there is still amazing opportunity to cash in on your built-up equity with phenomenal appreciation rates year over year. Demand is still there and you’re still in a position to get a fantastic offer for your home.
If you have any questions about how the housing stats might impact your decision to buy sell or invest reach out to us! We’d be happy to dive into this in greater detail and take a closer look at your unique situation so we can help you determine the next right steps for you!