Weekly Boston Real Estate News & Listings Updated 2021
- In June, new listings increased 5.5% year over year and 10.9% compared with May, according to Realtor.com.
- Among the nation’s larger cities, the 10 markets with the highest new listings increases posted gains of 20% or more from a year ago.
The epic housing shortage that began before the pandemic and then was exacerbated by it may finally be starting to ease up.
More supply is suddenly coming on the market, which will certainly help frustrated buyers and could, in the longer term, take some of the heat out of home prices.
In June, new listings increased 5.5% year over year and 10.9% compared with May, according to Realtor.com. Among the nation’s larger cities, the 10 markets with the highest new listings increases posted gains of 20% or more from a year ago.
The jump in inventory is surprising, because new listings historically fall between May and June, following the busy spring market. Today’s housing market, however, isn’t following the usual rules, since the pandemic created unprecedented sudden demand for larger suburban homes.
The unexpected new supply is certainly welcome news for homebuyers, many of whom have been sidelined in bidding wars, but the market is still extremely lean. The inventory of homes for sale was down 43.1% year over year at the end of May, representing 415,000 fewer homes for sale on a typical day in June. That is, however, an improvement from the more than 50% declines seen in March, April and May. New listings, again, were higher, but still well below the pre-pandemic average for June.
If more homes continue to come on the market, along with a steady increase in new construction, the housing boom will slowly pull back. It is unlikely, however, to decline sharply, or “bust,” simply due to favorable demographics and still historically low mortgage rates.
If these trends persist, inventory declines and price growth may continue to moderate as the housing market returns to a more normal pace of activity heading into the second half of 2021
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Racist redlining practices shut out Black families from much of the housing market for decades, denying them the chance at building housing wealth that can compound over the generations. Meanwhile, discrimination reportedly persists in the mortgage industry, where Black applicants are more likely to be denied a loan or charged a higher interest rate, and some appraisers undervalue Black-owned homes.
In response to those challenges, the Home Center launched its new ONE+Boston program in 2020, which combines down payment assistance with a discounted interest rate: The city buys down the loan’s interest rate by a half or even full percentage point.
The program has been a hit. “We’ve seen a huge demand for this program,” Flynn said. “We’ve processed more than 150 applications, and we just got going in June.” More than 50 of those applicants have found a home to date, and 70 percent have been households of color.
Program participants must be residents of Boston purchasing a home within the city. They must also graduate from a first-time home buyer course (recommended for any new home buyer) and meet income limits to qualify. The most generous rate discount is available to those earning less than 80 percent of the area median income for Boston, which the Department of Housing and Urban Development currently defines as $66,650 for a single person, $76,200 for a couple, and $83,300 for a family of four.
Another program, created by the Massachusetts Affordable Housing Alliance (MAHA), rewards first-generation home buyers who save up $2,000 toward a home with a matching $2,000 grant. This attempts to strike directly at the downstream effects of our intergenerational wealth gap.
Boston First Time Condo Buyers
These first-time home buyer programs require a fair to good minimum credit score — typically 640 for a single-family or condo and 680 for a multifamily — which was also identified as an obstacle for home buyers of color, particularly since credit scoring models have a long history of being discriminatory. To address that, Boston Home Center plans to launch a new program in the spring that will offer a $5,000 grant to first-time buyers who enroll in credit coaching class and are able to raise their score by 40 points or more, to 680 or higher.
For more details on the city’s home buyer and homeowner resources, including eligibility guidelines, first-time home buyer classes, and resources for existing homeowners and seniors (including low-interest deleading and home repair loans), visit the Department of Neighborhood Development’s Boston Home Center website.
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Updated: Boston Real Estate Updated 2021
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