Home sales in Greater Boston barely rose above a two-decade low in January as stubbornly high mortgage rates continue to freeze both prospective buyers and sellers out of the housing market.
Just 519 single-family homes were sold in the region last month, up 1.4 percent from the 512 sold in January 2023, which was the lowest January sales volume since at least 2004, the Greater Boston Association of Realtors reported Tuesday.
The condominium market proved even weaker. In GBAR’s coverage area, which includes much of Greater Boston except for the North and South shores, sales plunged nearly 30 percent: Only 411 condos were sold last month, compared with 565 in January 2023.
Statewide, the story was much the same. Single-family homes were virtually unchanged from January 2023, and condo sales fell dramatically, according to data from the Warren Group, a real estate analytics firm.
“The issues that pained the Massachusetts housing market in 2023, like limited inventory, economic uncertainties, and higher interest rates are still at the forefront [for] prospective buyers,” said Cassidy Norton, associate publisher of the Warren Group. “In the coming months relief for prospective homebuyers with realistic budgets seems unlikely.”
January is always a slow month for the housing market — but not this slow. Sales are down 30 percent from January 2022, when buyers closed on 755 single-family homes, and more than 40 percent from 2021, when 883 single-family homes sold.
The main factor depressing the market is interest rates. Would-be sellers are reluctant to put homes up for sale and give up ultra-low mortgage rates locked in over the past few years. That has kept inventories low and prices high, leading prospective buyers to call off home searches because they can’t find or afford homes.
The average rate on a 30-year fixed mortgage was 6.77 percent last week, according to Freddie Mac, a drop from the peak of nearly 8 percent last fall but double the rates of 2021.
The state of the market does not bode well for housing affordability. Typically, prices are relatively stagnant at this time of year, but they rose significantly in January. The median single-family home in Greater Boston sold for $820,000 last month, a 16 percent increase from the same time last year.
The Greater Boston Association of Realtors said it sees a few modest bright spots. More people are coming to open houses, for example, an indication that demand remains strong and potential buyers may be willing to accept higher interest rates. Single-family listings also rose modestly last month, perhaps showing that sellers may also be adjusting to a market with higher interest rates.
“We’ve seen a steady increase in foot traffic at open houses since the beginning of the year, which bodes well for the upcoming spring market,” said Jared Wilk, president of GBAR and a broker with Compass in Wellesley. “The level of buyer interest is the strongest we’ve seen in at least six months, with the majority of those currently in the market much more serious and intent on buying than those who were shopping for a home this past summer and fall.”
But for the market to start moving again, more sellers have to join in.
“What we need now is an influx of listings to meet the demand,” Wilk said.
Andrew Brinker can be reached at andrew.brinker@globe.com. Follow him @andrewnbrinker.
Read More: Greater Boston housing market continued to slouch in January