Massachusetts bucks the national trend with fewer homes for sale, rising prices, and steep challenges for first-time buyers.
A Unique Market in the Northeast
While most of the U.S. housing market is experiencing an influx of inventory, Massachusetts real estate is heading in the opposite direction. Instead of more options, buyers in the Bay State are facing fewer listings, higher home prices, and increasing competition, making affordability an even bigger hurdle for families and first-time buyers.
Fewer Homes, Higher Prices
In 2019, nearly half of homes for sale in Massachusetts were priced under $500,000.
By 2025, that number has dropped to just 22 percent, a mere 2,400 listings statewide.
Luxury homes have surged. In 2019, only 18 percent of listings topped $1 million. Today, that number has doubled to 36 percent, with more than 4,000 homes listed at seven figures or more.
Total housing inventory fell from 18,000 listings in 2019 to just 11,300 in 2025.
This lack of affordable housing has put younger buyers, especially millennials, at a major disadvantage. Nationally, only 36.4 percent of adults under 35 own homes. In Massachusetts, the odds are even tougher.
Why Millennials Are Struggling in Massachusetts
From a loan officer perspective, the problem isn’t always financing, it’s the competition. Even well-qualified buyers are struggling to win bidding wars, often needing to save not just for a down payment but also for the inevitable price escalation that pushes homes above list price.
Key Challenges for First-Time Buyers
Bidding wars: Buyers must budget for the possibility of paying over asking price.
Limited affordable inventory: Few homes remain under $500,000.
High rents: Rising rental costs make it harder to save for a down payment.
Student debt: Many borrowers carry six-figure loan balances, limiting savings potential.
The emotional toll can be just as tough as the financial one. Losing multiple bidding wars often leaves first-time homebuyers feeling discouraged about homeownership altogether.
Why Inventory Is So Tight
According to housing economists, the lack of new construction is one of the biggest culprits. In much of the Northeast, including Massachusetts, there has been limited building of entry-level, single-family homes. That means fewer affordable options hitting the market, forcing existing sellers to list at higher prices without much competition.
Sellers hold the advantage, and many are capitalizing by listing properties above $1 million, knowing buyers have few alternatives.
The Bigger Picture: Housing Costs Keep Climbing
The issue isn’t limited to Massachusetts. Nationally, home prices have soared since 2019:
Median U.S. list price: $439,990 (July 2025)
Up more than 37 percent since 2019
Price per square foot up nearly 52 percent in the same period
Layer in rising rents, inflation, and the burden of student loan repayments, and affordability becomes a nationwide problem, just magnified in Massachusetts.
What Buyers Can Do
As a loan officer, here are some strategies I recommend for buyers navigating this tough market:
Get fully pre-approved early, not just pre-qualified. A full underwrite strengthens your offer.
Explore alternative loan programs such as Bank Statement Loans, NonQM mortgages, and lower-doc options that can help self-employed borrowers compete.
Consider expanding your home search area. Commuter towns outside of Boston may offer better affordability.
Budget beyond the down payment. Set aside funds for possible bidding wars and appraisal gaps.
Work with a local lender and realtor team. Market knowledge and fast execution often make the difference in winning offers.
Final Thoughts
The Massachusetts housing market stands out as one of the most competitive and costly in the country. Without new construction and more affordable housing options, many first-time buyers could remain locked out for years to come.
For buyers serious about entering this market, preparation is everything, from securing the right mortgage strategy to building flexibility into your budget. While the road isn’t easy, the right plan can help turn today’s challenges into tomorrow’s opportunities.
Contact Us Today
Want to talk about how this affects your home buying journey, refinancing strategy, or real estate investment?
Schedule a consultation with Everyday Lending Group today.
