Housing

As Mortgage Rates Jump, Boston Real Estate Market Starts to Normalize

A 30-year-fixed mortgage in September of 2021 sat at 2.88% - by mid-March of 2022 it was up over 4%. Three months later the rate had risen to 5.75% and now it sits at 6.29%

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It wasn't that long ago when buying a house was something of a feeding frenzy.  The seller's market brought on by low interest rates and the pandemic left a lot of buyers out in the cold. 

"We couldn't keep listings on the market very long and we had buyers that were very disappointed when they couldn't get it," Annette Dardeno Givens with The Charles Realty said.

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She said people were bidding, not simply buying.

"It was just a matter of how much more over asking you'd pay and there'd always be someone else who might pay more."

Interest rate hikes put the kibosh on that.  A 30-year-fixed mortgage in September of 2021 sat at 2.88%.  By mid-March of 2022 it was up over 4%. Three months later the rate had risen to 5.75% and now it sits at 6.29%

 "Rates have more than doubled in the last six months which is pretty much slowed refinancing down to almost zero," avi Pahuja with the Mortgage Network explained.

But, he said, it's also normalized the real estate market.  

"There's opportunity out there now. Maybe the people that couldn't buy a year or two ago are now going to be more able to be more proactive and get their offer accepted."

Dardeno Givens said that's good.  

"I was concerned for the next generation coming in if this continued to happen. That they were not going to be able to afford to buy."

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