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Even the high end of the Massachusetts housing market is feeling the pressure as constrained inventory keeps pushing prices up.
The median single-family sale price increased 7.9 percent in 2024 to end the year at $615,000, according to data from The Warren Group, the publisher of Banker & Tradesman. The commonwealth continued to deal with a lack of inventory, partially due to high mortgage rates keeping buyers and sellers on the sidelines.
“It was great that we had some softening in the rates, but I don’t really think it had a huge effect on freeing up any inventory,” said Paula Filas, a vice president at brokerage J Barrett & Company in Beverley. “We had clients mostly upsizing. We didn’t see our clients downsizing, and that’s where we think that this lack of inventory stems from, people not moving because they don’t really know where they’re going to go.”
Greater Boston Association of Realtors 2025 President Mark Triglione said that in his decade-plus of industry experience, the 2024 market was an anomaly he had never seen before. The Federal Reserve did drop its benchmark interest rate in the fall, but prospective buyers didn’t see much of that reflected in mortgage rates once they looked them up after hearing about the cuts in the news.
“The way we were explained by the mortgage industry is that the lenders already had factored in that rate reduction,” said Triglione, who’s also the broker at Reading’s Premier Realty Group.
That the lack of relief in rates can create apprehension from buyers who were expecting their rates to go down as the fed cuts began, he said.
While there were some differences from prior years, the number of sales crept upwards: 42,019 single-family homes were sold in 2024 representing a 2.9 percent increase over 2023’s historically low transaction total.
“Basically through all of 2024, one of the things that was consistent with 2023 and 2022 and 2021 was that any quality property that was priced right was still selling immediately,” Triglione said.
Buyers Putting Off Buying
According to the National Association of Realtors, the age of the average home buyer is also increasing. The average age of a homebuyer in Boston is 40 years old while nationwide home buyers’ ages hit all-time highs. The average homebuyer’s median age was 56 years overall, an increase from 49 years old in 2023.
This is also true for first-time homebuyers whose median age increased from 35 years old to 38 years old last year. The increase in age can be attributed to the rising cost of homes, experts say, but also some renters are deferring homebuying.
“We've seen more and more first-time home buyers in their 30s and 40s, where the rent environment or the flexibility associated with renting kept them in that atmosphere longer,” Triglione said. “So first-time home buyer, like a 26-year-old, professional [or a] a 28-year-old professional, engaged couple that are piling resources and can now afford a home, but we've actually seen some first-time home buyers that are not with those profiles.”
Colleen Barry, CEO of Boston-based Gibson Sotheby's International Realty said that Massachusetts buyers tend to skew younger than other parts of the nation.
But the current rental market is making it even more difficult for young people to save for a home.
“The cost of renting is high, so it's hard for young people that are just starting out to save for a down payment, to save money to put into the markets and what have you,” Gerry Bourgeois, senior adviser to the CEO and COO at Lamacchia Realty said. “I think that's one of the main drivers of the median age of the first-time buyer being older than it has been.”
Luxury Disappointment
The higher end of the market is also seeing price increases. According to Zillow data, the median price of a top-tier Greater Boston home (single-family and condominium homes within the 65th to 95th percentile range by price) rose from $766,053 in December of 2018 to $1.08 million in December of 2024 – a 41.4 percent increase.
With the cost of a home at the upper end of the market jumping, buyers are left feeling disappointed with what they can get for $1 million and more, according to Triglione.
“Even if you're doing really well, there's still something in American culture about that million dollars, and people are crossing it now and buying what just a few years ago was an $800,000 home and that creates a level of disappointment,” he said.
Besides the price point, Triglione noted that buyers can be left with a bad taste in their mouth due to properties feeling overpriced, or having old amenities or designs.
“There's something about that, in my opinion, something culturally about that million-dollar mark, that there's an expectation,” he said. “Not that you're gonna have a movie theater or anything [in the house], but just that maybe you're going to have a flat backyard or a finished basement or a bathroom that doesn't have 30-year-old tile in it. So for a lack of a better word, I think disappointment is a very common experience for buyers in that price point.”
Even though high rates have dramatically curbed the number of buyers who can afford the Massachusetts market these days, Triglione said, luxury buyers also spent 2024 battling stiff competition to purchase a home.
That competition was felt across income levels according to J Barret’s Filas.
“It doesn't really matter what the price point is. It's across the board,” she said.
Entry-level luxury homebuyers in communities like Arlington Heights – median 2024 single-family sale price, $1.1 million – are being faced with the realization that their money doesn’t buy as nice a house as they thought. iStock photo
Rates Still Poised to Pose Problems
While luxury buyers might not be as burdened as those with smaller budgets, their homebuying appetites were still pinched by high interest rates.
Sam Minton
“That higher end of the market did slow down,” Gibson Sotheby’s Barry said. “I think a lot of people assume when a cash deal happens, that that means that they intend to keep it liquid, but in many cases, they do plan to finance – sometimes it's just after the deal is closed. So, particularly those margin loans are affecting that high end of the market, but we are seeing people move forward.”
Looking ahead to 2025, interest rates could continue to cause a problem for the market, whether it be in the form of homeowners not wanting to sell a home with a low mortgage rate or buyers staying on the sidelines until rates drop.
“We as a marketplace have kind of been told for a while now that there was going to be some relief with rates,” Triglione said. “I think that that's actually slowed some people down, because it's really hard to walk away from 2.9 [percent] or a 3.5 [percent] interest rate. Even if you're mentally ready to move on from the property, a lot of sellers aren't willing to move on from those rates.”
