Cost of Buying a Home Has Jumped 55% in a Year - As Interest Rates Rise, Median Price in RI $416K
Sunday, October 16, 2022
If a year ago you borrowed $400,000 with a 30-year fixed rate mortgage at the then standard interest rate of 3.05%, then your monthly payment was $1,696.
Now, that same $400,000, 30-year fixed has an average interest rate of 6.92% and a monthly payment of $2,640. The rates are according to mortgage company Freddie Mac.
That is especially bad news in Rhode Island, where home prices continue to be at record levels — for September, the Rhode Island Association of Realtors reported last week that the median price of a single-family home was $416,000.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThis turbulence is providing no let-up for Rhode Island buyers.
Buyer's or Seller's Market
Ben Scungio with Mott & Chace Sotheby’s International Realty appeared on GoLocal LIVE, where he talked about the current state of the Rhode Island real estate market.
“Inventory’s creeping up — it’s higher than it was this time last year,” said Scungio.
So is it a seller's market still?
“In my opinion, it really depends on where you’re looking. There are certain locations where inventory’s still below one month [where] it’s definitely still a seller's market,” said Scungio.
“That being said, aspirational pricing is not being rewarded. There are still prices dropped on homes. Usually, when prices are dropped, there are still sometimes multiple offers on it,” said Scungio.
“So I can’t really say ‘it’s a buyer's market’ and ‘it’s a seller's market’ — it’s an interesting real estate market depending on where you’re looking.”
Little Inventory, Boston's Prices
Prices continue to rise, however, due to a shortage of inventory that has led to a 1.7-month supply of homes for sale at the current rate of sales, a slight dip from the previous month and well below that of a healthy market.
The restraint in sales is causing prices to moderate from the double-digit growth in year-over-year appreciation seen through much of last year, though in September, single-family homes were still selling at 101% of list price.
In the Boston metro area, the median price of a single-family home rose in August to $780,000, according to the Greater Boston Association of Realtors. This is pushing more and more Massachusetts residents to look to Rhode Island as an option.
“The pandemic brought vast numbers of buyers from out of state, which further depleted an already low inventory of homes for sale. Now, with mortgage rates rising rapidly and the threat of recession on the horizon, the housing market has slowed considerably,” said Agueda Del Borgo, President of the Rhode Island Association of Realtors.
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