Median house price in RI hits $450K

The median price of a single-family home in Rhode Island hit $450,000 in August, an 11.1% year-over-year gain and an all-time high.

August’s gain is the first double-digit price increase since June of 2022, said the RI Association of Realtors on Tuesday. The last time the price of a single-family home fell in the state was January 2017.

Even as prices escalate, sales remain stagnant due to severely limited supply. Total closed single-family home sales in Rhode Island fell more than 25% in August compared to the prior year.

First-time Rhode Island homebuyers looking to purchase a condo will be hard-pressed to find a bargain. At $384,500, the median price of a condominium rose 22.7% from the prior year. At the same time, closings were down by 11%, the association said.

Rhode Island’s housing shortage — with fewer than two months supply of single-family homes on the market — is worse than that of the U.S. as a whole, with its 3.3 month supply, according to the National Association of Realtors. But both state and national inventory remains well below the five- to six-month supply which typically indicates a balanced market.

High mortgage rates, now hovering around 7.5% for a 30-year fixed loan, contribute to the state’s affordability problem. But Bryant Da Cruz, president of the state’s realtors association, predicted light at the end of the tunnel.

“Despite the fact that prices remain high, prospective buyers should be aware that many economists are predicting falling mortgage rates next year. If they can manage to secure a home now, and start building equity, they could have the chance to refinance next year,” Da Cruz said.

Rhode Island still remains more affordable than neighboring Massachusetts, where the median sales price for a single-family home stood at $600,000 in August, a 6.2% increase from the prior year. The median price for a Massachusetts condo was $525,000, a 9.4% year-over-year boost. Both prices broke all-time records.

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