Why Massachusetts' housing supply is locked up
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More than two-thirds of homeowners with mortgages in Massachusetts have a rate below 4%, per Redfin data shared with Axios.
- That's locking homeowners in place and leaving buyers with few homes to choose from.
Why it matters: Mortgage holders across the country are experiencing the "golden handcuffs" phenomenon: they might have a great rate now, but likely can't move without spending a lot more cash, explains Redfin chief economist Daryl Fairweather.
By the numbers: 40.6% of Massachusetts homeowners have a rate between 3% and 4%.
- 26.3% have a rate below 3%.
- Only 6.7% of homeowners pay a mortgage rate over 6%.
What they're saying: "Now you've got this downward spiral of people not listing, not selling, not buying and it's really tying things up this year," associate publisher of the Warren Group Cassidy Norton told Axios.
- "While we may sell as empty nesters, where are we going? Anything that is 'downsizeable' is out of our price range," reader Amy S. told Axios Boston.
- Amy's children are unable to afford homes in Framingham, the town where they grew up and the cost of living on a fixed income is taking its toll, she said.
Zoom out: Nine in 10 U.S. homeowners secured mortgage rates below 6% as of late 2022, per the new Redfin report.
- Meanwhile, mortgage rates have swung between 6 and 7% nationally in recent months.
Yes, but: Buyers are also exploring adjustable-rate mortgages or buydowns in hopes of a lower monthly payment, Fairweather says.
Reality check: Lower rates could loosen up some supply, but not enough to meet demand, Fairweather says.
- New construction isn't keeping up, either. Fairweather predicts it'll take the U.S. a decade to repair its housing shortage.

