Three main factors drove the Real Estate Market in Boston at the end of 2022:
Mortgage rates, low inventory, and inflation.
Mortgage rates are turning the corner after climbing above 7% and steadily increasing through 2021. This has had a hand in keeping Boston's housing inventory low, remaining fairly constant with a 6% increase from November 2020 to November 2022. The inflation rate hit 9% in July 2022 and has since decreased to around 7% at the end of 2022.
All things considered, as long as there remains to be plenty of demand, sellers will continue to thrive and be able to set competitive prices. It has been a rollercoaster of global phenomena over the past few years; given these circumstances it has been easy to form recency biases and loose perspective of longer time frames. This is particularly true when talking about economic changes. Many sectors have taken hits yet remain stronger than years prior. For example, the average Mortgage Interest rate over the last 40 years (around 8%) is higher than today's 7%. It even hit 18% in the 80’s.
May this be a reminder to challenge your perspective, we all can take a step back and look at the bigger picture.
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Ceizyk, Denny. “Historical Mortgage Rates: Averages and Trends from the 1970s to 2022.” ValuePenguin, ValuePenguin, 21 Oct. 2022,