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Boston is defying the trend of the national housing slowdown—and while buyers across the country grapple with high prices and sluggish sales, the Massachusetts capital is heating up.
Here, homes in the metro area are flying off the shelves three times faster than the national pace, even as the cost of a single-family home hovers near the $1 million mark.
The number of single-family homes sold in Greater Boston last month increased 6.4% year over year, from 1,010 to 1,075, according to the latest housing report by the Greater Boston Association of Realtors.
The typical home in Boston and the surrounding area sold for $980,000, up 3.2% from a year ago, setting a new record for the month of May.
In comparison, the median sale price in Boston in May 2019 was $635,000, or more than 50% lower than last month.
Looking at Boston’s inventory, the number of for-sale single-family homes spiked more than 27% compared to a year ago, but new listings edged down by 1% year over year, from 1,784 homes in May 2024 to 1,766 last month.
The typical single-family home in Boston waited 16 days for a buyer in May, up from 15 a year ago—but it was still more than three times faster than the national median of 51 days, according to the Realtor.com® May Monthly Housing Trends Report.
“The combination of increased inventory and sustained sold-to listing price ratio gives both buyers and sellers different reasons to celebrate the same market,” says GBAR President Mark Triglione, who also operates Premier Realty Group, Inc. in Reading, MA. “At the same time, median sales prices continue to reach all-time highs.”
(Realtor.com)
Low inventory and high demand
Like other parts of the Northeast, Boston and its suburbs have continued to experience intense buyer demand coupled with chronic inventory shortages over the past several years.
According to Realtor.com Senior Economic Research analyst Hannah Jones, this persistent imbalance has pushed home prices steadily higher and created a highly competitive market for buyers.
As Boston itself grew prohibitively more expensive, cash-strapped buyers started casting about for more budget-friendly properties outside Boston’s city limits.
“House hunters in search of greater value have looked beyond the urban core, fueling activity across the broader region,” explains Jones.
Perhaps unsurprisingly, Boston and nearby metros—among them Springfield, MA, Amherst, MA, and Manchester, NH—have dominated the Realtor.com Hottest Markets list over the last few years, as low inventory drove listing viewership higher and time on market lower.
(Realtor.com)
Boston’s haves and have-nots
Despite robust demand, many aspiring buyers are being sidelined due to limited home availability and elevated prices. On top of that, high mortgage rates stuck in the upper 6% range have only added to consumers’ affordability woes, especially for low- and middle-income households, forcing many to remain renters longer.
But affluent households, unconstrained by financial burdens and monthly rent payments, have been able to take advantage of the situation.
“These buyers continue to find success in Boston’s tight housing market, particularly in higher-priced segments,” says Jones.
Boston is not unique in this respect: The dynamic affecting the city’s red-hot housing market mirrors trends observed nationally.
When it comes to affordability issues, low-income buyers are disproportionately squeezed out, while their wealthier counterparts are able to compete more effectively in today’s high-priced market.
Triglione, GBAR’s president, describes the situation unfolding in Boston as a push and pull between buyers and sellers vying for limited but highly desirable real estate—with no end in sight.
“Greater Boston has such robust medical, educational, and scientific resources as people are always looking to move here,” he says. “At the same time, townies like me don’t want to leave, so even if the market displays more balance between sellers and buyers than in recent history, there is no indication prices will come down any time in the foreseeable future.”
Boston among nation’s least affordable metros
Despite the strong numbers for May, affordability woes continue to plague Boston’s housing market, leaving a large segment of the local population effectively priced out of homeownership.
According to a new Realtor.com Affordability Benchmark Report, Boston was the fifth least affordable metro in the U.S. behind Los Angeles; San Diego; San Jose, CA; and New York, NY.
With a May median listing price of $879,000, most households in Boston cannot afford to buy the typical home with a 20% down payment .
The typical household in Boston earning $109,295 per year would have to spend more than 64% of its annual income to buy a median-priced home and keep up with mortgage, tax, and insurance payments estimated at more than $70,000.
For a Boston family to have enough money left over for other essential expenses, it would have to set aside a staggering down payment of roughly 80% of the purchase price.