Boston, Ma home price growth exceeds Eleven percent in May 2022, deceleration on the horizon: Massachusetts HomeBuyers HomeOwnerhsip

 Steeper mortgage rates and priced out buyers paved the way to a slightly cooler housing market in Boston and other major cities this spring, hinting that the booming post-pandemic seller’s market may have an expiration date. Although the market appears to be shifting slightly in favor of buyers, aspiring U.S. homeowners shouldn’t expect to see lower home prices or interest rates anytime soon. There is a silver lining, however. While home prices aren’t likely to decrease, projections by CoreLogic show annual price appreciation slowing to five percent by May 2023.

 This would be a significant change of pace from the current home price growth rate, which surged nationwide by more than twenty percent over the last twelve months ending in May, according to the CoreLogic Home Price Index.  Month over month, the increase was one point eight percent, fueling the momentum of home price growth over the last decade. Prices for single family homes in Boston increased by eleven point one percent year over year in May, up from ten point nine percent month over month. Florida registered the highest year over year home price growth, up thirty three point two percent, followed by Tennessee at twenty seven point four percent and Arizona at twenty seven point three percent. The District of Columbia ranked last for appreciation at four point three percent, although CoreLogic forecasts its price growth to rise slightly by May 2023.

 Tampa and Phoenix led the country in gains on a metropolitan level, with home prices up thirty three point four percent and twenty eight point seven percent, respectively. Even as surging interest rates suppress the demand for housing, CoreLogic suggests that motivated buyers may have less competition and more opportunities ahead. “Slowing home price growth reflects the dampening consequence of higher mortgage rates on housing demand, which was the intention,” said Selma Hepp, deputy chief economist at CoreLogic.

 With monthly mortgage expenses skyrocketing by roughly fifty percent in a matter of months, fewer buyers are competing for continually limited inventory, Hepp noted. “And while annual home price growth still exceeds twenty percent, we expect to see a rapid deceleration in the rate of growth over the coming year,” she added. “Nevertheless, the normalization of overheated buying conditions should bring about more of a balance between buyers and sellers and a healthier overall housing market.”

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First Time Home Buying in Massachusetts

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