Is buying a house too expensive for too many people in the Boston area?
BOSTON – Data released this week from the Greater Boston Association of Realtors reveals that in July 2023 the median house in Greater Boston sold for $910,000.
WBZ-TV's Question Everything series has previously explored the impacts and shortfalls of affordable housing efforts, and the stunning new numbers about home purchasing was a reminder to revisit the problem.
"I'm 27 and no one that I know like owns a property," said Audrey Stein, who rents in Watertown.
"It seems just less and less likely to be a young person, living in any type of city these days," added Calla Begley of Boston.
For young families attempting to buy their first home, the number is shocking but not surprising.
"Absurd. It's absurd," said Kristina Simkus, who currently rents in Quincy with her fiancé Ben and has been looking to buy for nearly two years. "Like you start to think…should I just move somewhere else?"
Simkus grew up in Massachusetts.
"I never thought in a million years that I would be the one not able to put down a deposit or buy my own home," she said. "It's hard. Even though we have two successful careers, we can't make enough money to get a deposit down or get a good mortgage rate."
Arthur Deych, the owner of Red Tree Real Estate in Boston, says it's a problem he hears regularly from clients.
"I feel bad for people because it's not only the $910,000 that cost a lot of money, it's also water, sewer, trash, removal, taxes, insurance," he said.
Dreych recently sold a 2,500 square foot condo in Newton for $1.25 million. He says prices have been rising in Greater Boston for 20 years. His advice?
"Number one, you have to have faith in the process. Good things happen to good people and we are all going to have a roof over our heads in the end. Number two: the interest rate being 7%… You know what's worse than that? Having 100% interest rate when you are renting," he said.
The numbers are less comforting. According to an online calculator by Nerd Wallet, a first time home buyer with good credit and minimal debt would need a household income of $220,000 to afford a $910,000 home. The median household income in Boston is $81,744, according to the 2021 US Census.
That's where companies like Lamacchia Realty say we as a society have to get creative. Lamacchia recently launched a service to connect buyers and sellers with assumable mortgages. Owner Anthony Lamacchia has a series of informational videos online on the topic.
Assumable mortgages are ones that can be transferred from seller to buyer. For example, rather than get a new mortgage on an existing home, a buyer could pay a slightly higher down payment and take over the seller's mortgage – at its 3% rate rather than the current 7% rate.
However, Lamacchia tells WBZ there are hurdles when it comes to the popularity of assumable mortgages - mostly from national lenders unwilling to give them, and state regulations that get in the way.
"This is something we're actively working on," he explained. "And we are coming up with several options for people to be able to do this."
If you have a question you'd like us to look into, please email questioneverything@cbsboston.com.
