Rate cut expected to further boost local housing market

The Blackstone Valley area real estate market shows no signs of slowing down, and the first Federal Reserve rate cut this year has the potential to make homeownership more affordable for many on the cusp of being able to buy.

"Property values in Northern Rhode Island remain resilient. Even with sales slowing in some communities, limited inventory continues to support pricing," said Jennifer Lemme, president of the Northern Rhode Island Board of Realtors. "We saw strong year-over-year gains in places like Cumberland and Central Falls, while other towns like Pawtucket and Woonsocket are holding steady."

Added Lemme, "This week's drop in mortgage rates to 6.26 percent could give buyers some much-needed relief on affordability. Lower rates, combined with ongoing demand, may encourage more buyers to step into the market and could motivate more homeowners to list their properties heading into the fall."

According to the National Association of Realtors, said Lemme, with mortgage rates now at the lowest level in a year, a homebuyer could see about $140 in monthly savings on a typical home loan.

"For many buyers in northern Rhode Island, that extra breathing room could be the difference between waiting on the sidelines and making the leap into homeownership," she said.

According to a report by the Real Estate Institute of Rhode Island prior to the official announcement this month, mortgage rates had started driving down from highs, and the state's market, still relatively tight on inventory with median prices in the $500,000 range, was likely to see renewed buyer activity, more financing, and a faster turnover in the short term.

"But local supply constraints, housing-type differences, and labor-inflation risks means outcomes will be uneven," it added.

The 30-year fixed national average had dropped to roughly the mid-6-percent range as of early September.

According to the report, an interest rate cut causes monthly payments to fall, immediately improving affordability and increasing refinance candidates among owners. Buyers who were previously priced out can afford higher bids, increasing demand pressure.

A cut isn't a guaranteed housing boom, it clarifies, as lower rates help, but affordability depends on incomes and area prices. If Rhode Island prices re-accelerate faster than wages, affordability worsens again.

The following top sales price numbers below are according to individual tax databases in each community:

In Pawtucket, 32 single and multifamily home sales exceeded the $600,000 threshold from July 1 to Sept. 17, including 13 exceeding $700,000, six exceeding $800,000, three exceeding $900,000, and one, a 3,335-square-foot home at 34 Dryden Ave., besting the $1 million mark, at $1.275 million.

For that same time period last year, there were 20 such home sales of more than $600,000, and five of those exceeded $700,000.

In Cumberland, one of the hottest real estate markets in the state, 89 homes sold for more than $600,000 during those weeks, compared to 80 for the same period a year earlier. A total of 52 sold for $700,000 or more from July 1 to Sept. 17, 33 sold for $800,000 or more, 16 sold for $900,000 or more, and nine sold for more than $1 million. There were 12 that sold for $900,000 or more last year.

The top sale from July 1 to Sept. 17 of this year in Cumberland was a $1.5 million home at 51 Womantam Lane.

In Smithfield, the same time period saw eight homes sell for $600,000 or more, with two of those over $900,000 and one over $1 million. The $1.06 million sale was of a waterfront (Georgiaville Pond) single-family ranch at 196 Stillwater Road. Last year, the time period from July 1 to Sept. 17 saw one home in Smithfield sell for more than $600,000, at $675,000, according to the town's real estate database.

In Lincoln, according to its tax database, high-end prices have dipped a bit. Fifteen homes sold for at least $600,000 from July 1 to Sept. 17 of this year, all but four of those over $700,000. Seven sale prices topped $800,000, and two exceeded $900,000. The top sale price of $995,000 was for a Colonial home at 10 Sables Way.

The same time period last year saw 18 homes sold in that higher price range, including three sales exceeding $1 million.

North Smithfield similarly saw a dip from last year, with seven homes sold for $600,000 or more from July 1 to Sept. 17, including five of those above $800,000. There were 15 such home sales last year.

In Woonsocket, 11 homes, all but two of them multifamily homes, sold for more than $600,000, none below $635,000.

In North Providence, four homes sold for more than $600,000

In Central Falls, seven homes, all multifamily and apartment buildings, sold for more than $600,000 during that period, none of those for more than $750,000.

In Scituate, six properties sold for more than $600,000, all exceeding $730,000.