5 Boston Real Estate Trends to Watch in 2024

Homebuyers in Boston may be wondering if this is their year to find their dream home, especially as we say goodbye to 2023 and welcome 2024.

Buying a home in 2023 was a tough endeavor for homebuyers, as the market saw limited listings, resilient prices, and elevated interest rates. But there’s hope for folks aiming to buy a Boston home in 2024, as anticipated changes in monetary policy from the Federal Reserve may bid good tidings for buyers financing their home purchase.

To help guide buyers on what to expect in the new year, the team at Prevu Real Estate put together top trends that will likely influence the Boston real estate market in 2024.

Economists anticipate lower mortgage rates in 2024

For the better part of 2022 and 2023, homebuyers were faced with soaring mortgage rates that briefly reached over eight percent for a 30-year fixed-rate loan, as a year plus of interest rate hikes by the Federal Reserve were used to dampen high inflation. Fortunately, there is growing optimism that this restrictive policy will soon be in the rearview mirror.

In recent months, the Federal Reserve paused their interest rate increases, and in a press conference following a policy meeting in mid-December 2023, Fed chairman Jerome Powell shared that projections from the FOMC suggest the potential of multiple interest rate cuts in 2024.

Mortgage rates have declined from recent highs since these statements, and more economists believe lower mortgage rates are on the horizon in 2024. This will be a welcomed relief to buyers sidelined in recent years, as the hope for mortgage rates in the five percent or six percent ranges would create greater purchasing power and lower monthly payments.

Buyers discover commission rebates to save

Real estate commission rates are always top of mind for homeowners when they are listing their homes for sale, as it is typically one of their largest closing costs. However, homebuyers may not have been as knowledgeable about commission structure as sellers—that is, until late in 2023.

In a recent lawsuit in Missouri, a court ruled against several brokerages and the National Association of Realtors (NAR) for past practices around real estate commissions. While the decision is likely to be appealed and tied up in further legal proceedings for some time, there is a silver lining for both buyers and sellers: greater awareness of how buyers and listing agents are compensated.

With this increased transparency on the topic, more buyers are aware of how their buyer’s agent is compensated by the owner, and now have the knowledge to seek ways to save in the process with a commission rebate.

The concept of a commission rebate is simple. A real estate broker gives the homebuyer a portion of the commission they receive for representing that buyer.

By working with a brokerage that provides commission rebates, homebuyers are saving thousands of dollars when purchasing pricey Boston properties. For instance, if you purchase a Back Bay condo for $1.6 million through Prevu, you can receive a rebate totaling up to one percent cash back or $16,000 with the company’s Smart Buyer Rebate.

Improving inventory

With economists predicting lower mortgage rates, there is the prospect that more homeowners will list their homes for sale.

Limited inventory is one of the biggest bottlenecks in the real estate market that often leads to bidding wars. With the potential for lower mortgage rates, there is an increased chance that more homeowners will have the confidence to move and upgrade, opening up their current property to the market.

Optimism around improving inventory may level the playing field and reduce the struggle between buyers and sellers. While there might still be bidding wars for well-priced homes, we can hope that some negotiating power will shift back toward buyers compared to years of sellers being in the driver’s seat.

New construction homes to hit the market

The lack of inventory over the past few years created an opportunity for both large developers and local builders in Boston to start rehabbing, remodeling, and constructing new homes. In towns like Medford, buyers can find new construction townhomes for sale.

“With buyers getting into bidding wars over fixer-upper properties, developers have taken to building large concentrations of condos and townhomes across the Greater Boston Area,” said Greg Cumings, a licensed real estate broker with Prevu Real Estate. “This should hopefully alleviate some of the inventory headwinds plaguing Boston and the surrounding suburbs as more of this new supply comes to market in 2024.”

Yet buyers can find new construction happening all around Boston. In places like Lexington you can find recently built homes sitting on plots where older homes once stood. The same is true for Newton and Weston, where buyers can find custom homes for sale.

Return to office influences homebuying

Several years ago, buyers working remotely sought homes with ample space for home offices. Now, with more folks returning to offices, buyers’ needs are changing. Many aspiring homeowners are asking their agents about commuting to Downtown Boston as companies are calling employees back to the workplace three or more days per week.

“Length of commute matters again to buyers,” noted Cumings. “People are focusing on the time it takes to get into Boston or Cambridge from the areas they’re searching for homes in.”

While many people still require some space to work from home, there is a growing contingent of buyers seeking the trade-off of homes with easier commutes rather than properties with large home offices in the suburbs or exurbs.

Interested in buying a home this year? Browse listings in your favorite neighborhood and see how much you could save with Prevu’s Smart Buyer Rebate.