Boston home prices fell for the first time since 2015 as buyers are taking their time deciding on a home purchase, causing homes to linger on the market longer, according to a new Redfin report.
That lingering is increasing inventory, something buyers are finding very beneficial right now. During the four weeks ended Dec. 25, the total number of homes available rose 18% from 2021, the largest increase since 2015.
According to the report, a typical home was on the market for 40 days before selling. That was double May’s record low of 18 days and was the slowest sales pace since January 2021.
Despite rising inventory levels, new listings fell double digits across the country. Redfin cites homes taking longer to sell, increased mortgage rates, economic uncertainties and the holiday slowdown as the cause. During the last week of December, the average 30-year mortgage rate rose to 6.42%.
Redfin deputy chief economist Taylor Marr said we’ll know more about the direction of mortgage rates and whether the recent uptick in the early-stage demand will translate into sales once we’re settled in the new year.
During the four weeks ended Dec. 25, home prices fell from 2021 in 17 of the 50 most populous U.S. metros, the report found. There was a 9% year-over-year drop in prices in San Francisco, a 6.5% drop in San Jose, and down 6% in Los Angeles, 4.5% in Detroit, 4.4% in Pittsburgh, 3.7% in Sacramento, 3.6% in Oakland, California, and 2.3% in Austin, Texas.
Home prices fell 2% or less in New York, Seattle, Anaheim, California, Phoenix, Chicago, Newark, New Jersey, Riverside, California, Boston and Washington, D.C. While this marked the first time Boston prices fell since 2015, it’s also the first time prices in Washington D.C. fell since 2016.
Thirty-year mortgage rates rose to 6.42% for the week ending Dec. 29, marking the first increase after six weeks of declines. The daily average, according to the report, was 6.55% on Dec. 29. Meanwhile, mortgage applications were flat for the week ended Dec. 21 and up 4.6% from November and purchase applications were down 36% from 2021.
The higher rate brought the average monthly mortgage payment on a median-priced home to $2,265, up slightly from the previous week and down $254 from its October peak. Year over year, mortgage payments are up 36.7%.
Pending home sales fell 31.8% from last year, once again marking the largest decline since January 2015.
During the week ended Dec. 24, Redfin found Google searches for “homes for sale” were “on par” with November, but down 28% from last year.
In the four weeks ended Dec. 25, active listings rose 18.2% from last year, marking the biggest annual increase since 2015. Meanwhile, new listings fell 21.6% from last year, one of the largest declines since the start of the pandemic.
The median asking price of a home rose 3% from 2021 to $349,950, the slowest growth rate since May 2020. Meanwhile, the median sale price increased 0.7% year over year to $351,860.