Boston Condos for Sale and Apartments for Rent
The outlook on the Boston condo market
it could be a frigid winter for Boston condo brokers and lenders if the Federal Reserve keeps raising interest rates on potential Boston condo buyers.
What’s happening with mortgage applications?
Mortgage application fell 14.2 percent from a week prior according to Mortgage Bankers Association’s data. That’s the slowest pace since 1997. The number 1 song that year was “Candle in the Wind” which could describe the fickle Boston condo market we’re experiencing now.
Mortgage rates are at their highest levels since June 2008, and Boston condo buyers are balking.
What are Boston condo Sellers doing?
Boston condo sellers have not lowered their prices down much at all. in part because so few homes are for sale. But drops could be coming as the reality of Boston condo buyers’ budgets catches up to sellers.
What’s happening in the refinance market?
Refinancing fell by 18 percent week-over-week and was down 86 percent compare to the same week last year.
What’s going on with new construction?
New construction has been on the decline since the 1980’s and a recent estimate by Realtor.com found the U.S. is short by more than 4 million homes.
Here’s the real crux of the Boston condo market situation:
- Limited Boston condo inventory
- Rising mortgage rates
- Affordability issues
Let’s concentrate on #3. This is truly the Great Divide of the haves and have nots. For example only 17% of home buyers can afford half of the homes on the market right now. That means 83% can’t afford to buy a condo and that’s up from 79% from the previous quarter.
Why aren’t Millennial’s buying? Of the Millennial Generation only 86% can afford less than 50% of the existing homes for sale. This is why there are bidding wars, 86% of Millennial’s are fighting for less than 50% of the housing inventory.
Your thoughts?
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