Homebuyer demand remains resilient, despite rates, shrinking listings MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgents

Homebuyer demand remains strong despite rising mortgage rates and shrinking listings, Zillow’s October market report found. Last month, homebuyer demand showed its resilience, despite mortgage rates being at a twenty three year high and inventory continuing to be limited, with homes priced appropriately being purchased in record time. Zillow chief economist Skylar Olsen says as mortgage rates neared eight percent in October, the U.S. housing market continues to cool, with inventory rising and appreciation decelerating.

“As interest rates rose, some pent-up sellers appear to have been shaken free of waiting for rates to drop,” Olsen said. “New listings have nearly escaped the red annually and are trending out of a mortgage rate lock-induced hole. A record number of households in prime homebuying ages are providing buyers, despite the headwinds.” October mortgage rates were eight percent at month’s end, pushing monthly payments up by more than four percent from September. And that average $1,991 monthly mortgage payment is almost ten percent higher than it was a year ago and nearly double what it was in 2021.

Home values on the rise

The national typical home value in October was $347,972, up two point three percent from a year earlier. October home values did fall point three percent from September (compared to the point one percent drop from August to September), showing “a slightly faster deceleration than pre-pandemic norms,” according to the report. In forty of the top fifty markets, home values fell in October. Boston home values rose six point eight percent year over year to $659,680 but were down point one percent from September.

Housing inventory ups and downs

Housing inventory last month was still depleted, as new listings fell five percent from September, a drop the report notes is actually smaller than seasonally expected. But, it also found inventory levels to be the lowest of any October since 2018. Total inventory was a different story last month as it climbed two point six percent from September, a result of “fewer sales and an unexpectedly small September dropoff in new listings,” Zillow said. New inventory in Boston in October fell nine point three percent from 2022, while total inventory dropped eighteen point nine percent.

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