This is the next US city where buyers will need $1M to buy an average family home

This is the next US city where buyers will need M to buy an average family home

Brace yourself, Boston — house prices are about to hit stratospheric levels.

Experts predict that Beantown will soon join the ranks of urban areas where the average family home costs a jaw-dropping $1 million.

A lethal mix of soaring construction costs, desperate buyers and homebodies unwilling to budge has catapulted house prices to dizzying heights in 68 of America’s 100 largest cities over the past decade.

Last month, the median sale price for a single-family home in Greater Boston hit an all-time high of $950,000, according to the Greater Boston Association of Realtors. With housing prices typically peaking in summer, the median sale price could easily hit $1 million this year.

A three-bedroom, three-bathroom home spanning only 1,000 square feet at 110 Leicester St. is on the market for $1.3 million. Google Maps
A five-bedroom, two-bathroom home with 1,800 square feet at 93 Dresser St. has hit the market for $1.25 million. Google Maps

Despite a slight increase in sales and more homes entering the market last month, it wasn’t enough to curb the relentless rise in prices. The median price soared 16% from April 2023, highlighting the brutal reality that homeownership is slipping further out of reach for many.

“It’s certainly a sobering statistic,” Luc Schuster, executive director of Boston Indicators, told the Boston Globe. “I don’t think there’s any clearer signal to the Legislature that they need to be working on all fronts to alleviate these price pressures. There’s no question that this is a crisis.”

The previous record of $910,000, set last summer, has been shattered. A 20% down payment on the current median-priced home now nears $200,000, a staggering amount for prospective buyers.

This four-bedroom home at 4343 Washington St. asks $925,000. Google Maps
A four-bedroom dwelling at 108 Goodenough St. asks $1.25 million. Google Maps

The market has been further destabilized by rising interest rates, with the average rate on a 30-year fixed-rate mortgage hitting 7% last week, according to Freddie Mac — double the pre-2022 average.

This spike in rates has essentially frozen the market. High prices mean higher monthly payments, deterring would-be sellers from upgrading to new homes, and leaving buyers with slim pickings. Home sales had been declining for two years until February.

The rural areas aren’t faring much better, with the median price statewide jumping 10% to $610,000 in the past year.

And in other cities like Detroit, home prices have doubled in just five years, per real estate marketplace Point2.

Point2

Miami and Tampa, Florida; Baltimore, Maryland; and Spokane, Washington, have all seen home prices double since 2018. In Irvine, California, already the priciest market in the study, prices have skyrocketed from $750,000 to $1.5 million in just seven years.

The insatiable demand has driven the total value of US housing stock up by $2 trillion in the past year alone.

“We’re stuck in a strange situation where prices are going up,” economist Adam Guren of Boston University told the outlet. “I don’t really see an end to it until a lot more inventory comes on the market. And I don’t see new inventory coming anytime soon because of construction costs.”

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