We are nearly at the halfway point of the year and all the predictions from the end of last year suggesting that interest rates would steadily increase and never again see the low rates of the pandemic have only just barely proven true. As of this week they have stayed below 3% for five out of the last six weeks for 30-year fixed-rate loans, reaching 2.95% based on the Freddie Mac weekly report. When we closed out 2020, rates were at 2.67% which was just one basis point higher than their lowest level on record from a few weeks earlier.
Real Estate Application have Increased
Applications to purchase a home have increased slightly over the past few weeks but buyers continue to be held back by a lack of affordable inventory. A survey of over 400 metropolitan areas in the U.S. conducted by Redfin showed the number of homes that sold over list price had nudged over 50% for the first time during the four-week period ending May 16. Other record highs the survey revealed include: 45% of homes had an offer accepted within one week of going on the market and the average sale-to-list price ratio reached 101.7%. The median sales price for homes also reached a record high of $352,975.
Boston Real Estate: Mortgage Rates
Mortgage interest rates are oh so low at least historically speaking and they will stay low next year or go even lower. Low interest rates tend to drive Boston downtown real estate prices up a bit and lower the average MID (Mortgage interest rate tax deduction)
Home buyers should always look at the big picture which I have to say is looking better all the time. Downtown Boston real estate buyers who can score an interest rate at say 2.5 – 3% may end up with Boston condo mortgage payments that are lower than Beacon Hill apartment rent and if they actually pay off their mortgage and stay in their homes they may have an asset to sell or a place to live without those pesky mortgage or rent payments.
However it might not be a good idea to buy this year if you think you will need to move in the next couple of years Homeownership works best for those who can stay put.