It’s been a miracle that sales and pricing this year have kept up with the 2024 numbers. Boston condo mortgage rates near 7% is cooling the market. Any Fed rate cuts are going to come too late (September/October) to save the Boston condo for sale market this year, but hopefully they will provide some juice for the early-2026 market.

I think a pattern is developing.

The first quarter of 2024 and 2025 were hot, then we muddle through the rest of the year. The same will probably happen next year too, where the surge of inventory bogs down the market by the second quarter

My opinion on the sustained real estate conditions in Boston

From my point of view, the excessively diminutive mortgage rates in the past decade plus have essentially maintained the Boston condo market in a perpetual state of synthetic demand extension. The Federal Reserve has been comparable to a drug supplier, unendingly supplying the market with cocaine at growing levels while everybody just stayed coming back for increasingly when they saw even the slightest inkling that we may be diminishing from that high.

After enduring mortgage rates below 5% for over 10 years, it’s time to detox from the low rate lifestyle. This necessitates a sudden and dramatic switch to a ‘normal’ mortgage rate and its accompanying impact on the housing market will be felt in full force.

‘Do Rising Interest Rates Lead to Falling Home Prices?’

To sum up, there have been occasions where an increase in mortgage rates caused real estate prices to drop. Particularly noteworthy was the time from 1979 to 1985, when interest rates dramatically increased by nine points and property values decreased by 20% in terms of real value.

Contrasting today’s reality from the early-1980s, home values at that time were not excessively exorbitant like they are presently. The climate today is highly contrasted to the landscape that existed in 2008, when numerous homebuyers made use of fraudulent credit and mortgages that were only feasible to maintain if prices experienced unending expansion. It’s difficult to guess precisely what the following housing market downturn will bring, though I do believe real estate values won’t manage to stay at their current exorbitant level with mortgage rates on an upswing again beyond 6%.

Time to pay the piper

Regret and anguish has been apparent due to the supposed ‘exorbitant mortgage rates’ and the Federal Reserve’s purported ‘slaughter of the housing sector’, but in my view, maintaining rates at such an incredibly reduced level for such a prolonged period was a blunder. Inevitably, mortgages will likely revert back to a 6-8% range.

Finally, here is a poetic mortgage rate rendition:”

It appears to be the appropriate moment.
to eventually settle the cost
to maintain low costs.

Updated: Boston Real Estate Blog 2025

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