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Prospective home buyers in Massachusetts and around the country have had to contend with an increasing triple threat in the real estate market in 2023: higher prices, lower inventory, and rising mortgage interest rates.
There has not been much relief, especially in recent months, until recently. The average rate for a 30-year, fixed-rate mortgage loan declined about a quarter point over the last week and is more than a half-point off this year’s high.
According to the Mortgage News Daily (MND) Rate Index, the average 30-year note in the United States reached 8.03 percent on Wednesday, October 18, 2023, its highest point in 2023. At the close of business on Wednesday, MND’s Rate Index stood at 7.41 percent. On Thursday, February 2, 2023, rates were at their lowest point this year at 5.99 percent.
What’s the difference between 8.03 percent and 7.41 percent? More than you might think. Assuming a $500,000 loan and a 30-year, fixed-rate mortgage, a borrower will save more than $200 per month.
The median price of a Massachusetts single-family home rose 3 percent in September to $565,000, a record high for September, according to data compiled by The Warren Group. The median condo price increased 9 percent in September to $500,000, a record high for September.
Greater Boston – defined by The Warren Group as the 139 cities and towns within Interstate 495 – saw the median house price increase to $705,000 in September, up by 3 percent compared to $682,500 in September 2022. The median condo price in Greater Boston rose 7 percent in September to $579,500 compared to $542,500 in September 2022.
“As Treasury yields decline, the 30-year, fixed-rate mortgage dropped a quarter of a percent (for the week ending November 9, 2023, compared to the week before), the largest one-week decrease since last November,” said Sam Khater, Freddie Mac’s chief economist.
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