'Very few people are interested in trading their three and a half per cent rate for a 7% rate'
In discussing the current real estate landscape, Anthony Lamacchia (pictured), CEO of Lamacchia Realty, didn’t hesitate to outline the considerable challenges high mortgage rates present, particularly in Massachusetts. According to US Money News, 30-year fixed mortgage rates are sitting at 6.78% - alongside the national average. For 5/1 adjustable-rate mortgages however, they’re averaging at 7.675% - an indication of the potential risks there.
“The mortgage rates are definitely causing problems,” Lamacchia told MPA, reflecting the mounting cost pressures on buyers and existing homeowners. Rates for many homeowners, he explained, remain locked in between 2.7% and 3.5%, while new buyers are confronting rates around 7%.
“Very few people are interested in trading their three and a half per cent rate for a 7% rate,” added Lamacchia. The result, he suggested, is a stagnating market where both first-time buyers and existing homeowners are increasingly hesitant.
“Rates need to come down back below five,” he insisted, believing that only then will the housing market regain traction. Until that happens, Lamacchia argued, only those “that absolutely have to move” will do so.
“Because everything is affected by rates,” he told MPA.
High interest rates have dampened enthusiasm in almost every sector, but Lamacchia identified first-time buyers as especially hesitant. The season amplifies this caution, he pointed out, as colder months bring “a lack of motivation.” For homeowners, he said, the situation is stark.
“They’re not selling unless they absolutely have to. We have a nation full of people that have excessively low rates, and they want to hold on to them. We’re gaining market share, we’re acquiring other companies, and we’re growing through this slowdown. This is the most challenging time that I’ve seen.”
Lamacchia contrasted the current market with the 2008 downturn, adding that ‘this is worse’.
“This is slower than 2008,” he said. “And the reason is affordability. During that time, people were strapped for cash, but rates were coming down. During that economic slowdown, rates were coming down - this time they're really not coming down, and it's making it challenging for people.”
Reflecting on the future, Lamacchia added: “Eventually this will end, this high rate period and this inflationary period… when it ends, let’s see who wins tomorrow.”
Beyond Massachusetts, Lamacchia noted regional variations in how homeowners are reacting to financial pressures. In South Florida, for instance, condo owners face increasing condo fees, leading them to list properties more frequently despite low rates. These unique market conditions, Lamacchia observed, require a flexible approach and a readiness to address region-specific challenges.
Through it all, Lamacchia Realty’s strategy underscores a readiness to adapt and expand, even in the face of formidable headwinds. While high rates and a tight market are reshaping real estate, Lamacchia’s approach highlights that, for those positioned to persevere, there are pathways to growth and resilience even amid the downturn.
