The rapid rise in mortgage rates in January created a bit of a panic among some Boston condo buyers, according to one expert, but will the increase be enough to stop the hot Boson condo for sale market?
“It’s spooked a number of homebuyers because they didn’t expect it. They thought that the affordability window was going to stay open forever,” Barbara Corcoran, founder of the Corcoran Group and Shark Tank guru, recently told Yahoo Finance Live (video above). “The real million-dollar question that every buyer has is, is the worst over? Or are we going to get surprised after surprise after surprise?”
Last week, the rate on the 30-year fixed mortgage — the most popular home loan for buyers — came in at 3.55%, slightly lower than the 3.56% the previous week, but still among the highest levels since March 2020, according to Freddie Mac. The rate is more than a half-point higher than a month ago.
Calling the increase negligible, Corcoran noted that applications to purchase a home increased after mortgages rose.
Additionally, December — traditionally the slowest part of the year for real estate — broke historic norms, she added. The number of homes for sale fell — instead of increased — forcing prices higher.
Total housing inventory dropped 18% in December from the month before to 910,000 units, according to the National Association of Realtors, the lowest level since 1999 when the trade group started tracking the data. Unsold inventory sat at a 1.8-month supply, down from 2.1 months in November. Six months of supply is considered a balanced market.
“As long as [rates] don’t continue up, up, up, up, up, up, which everybody is saying they won’t…I just think we’re going to have such a robust market continuing right through the following year,” Corcoran said, “unless something dramatic happens.”
Updated: Boston Real Estate Blog 2022