G+ April 2024 Market Update

As challenging as housing affordability is for prospective renters, it is still not so easy for all but the most affluent prospective homebuyers. Based on data from StreetEasy, the median sales price for homes that sold in 2023 was $764K, down about 2% from a record high of $782K in 2022 but back up to $785K in early 2024. However, compared with the months leading up to the pandemic, the city’s median home price has risen far less dramatically than nationwide: up roughly 16%, compared with 42% nationwide, corresponding to average annual price growth of roughly 4% (locally) and 10% (nationally). 

One factor bolstering home prices is a relative dearth of inventory. The inventory of homes available for purchase, as shown in Chart 1 below, has declined steadily over the past three years and is just about at a seven-year low. In addition to the restraint on supply caused by a chronic shortfall of new housing development, the rapid rise in mortgage rates over the past two years has created a condition called “housing lock”. That is, many homeowners who might otherwise be inclined to sell are reluctant to give up the exceptionally low mortgage rate that they locked in while rates were low, or to sell at prices they perceive may be lower given prospective buyers’ higher rates.