In 2025, the Boston condo market shows signs of recovery as more homeowners begin listing their properties. The 'lock-in effect', which kept owners from selling due to low mortgage rates, is fading. Although mortgage rates remain high, many are adapting to this new reality. Realtor.com projects a 1.5% increase in home sales driven by gradual decreases in mortgage rates and increased listing activity, with a significant 10.8% rise in newly listed homes year-over-year. January saw a remarkable 37.5% spike in listings compared to December, indicating robust market movement.
The 'lock-in effect' refers to Boston condo owners' reluctance to sell due to their low mortgage rates versus the higher rates they would have to pay on new mortgages.
While rates remain elevated, we might be seeing that chiseling effect starting as sellers may grow tired of waiting for significant changes in rates.
Overall home inventory was up 24.6% compared to last year, marking the 15th consecutive month of growth in active listings.
Freshly listed homes increased by 37.5% compared with December, representing the largest month-over-month spike in five years.
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