By Kallejhay Terrelonge, Belmont Voice correspondent
Mortgage rates have bounced up and down over the last year, but in Belmont, the math continues to point in the same direction – buyers can afford more house, but there are fewer properties to compete for.
Juliet Jenkins, a real estate agent with Leading Edge Real Estate, said proximity to Boston, highly rated schools, and quiet, tree-lined streets continue to attract buyers, even as prices climb.
“A 1% change in interest rates probably isn’t what makes someone move,” Jenkins said.
Instead, she said, life changes drive most housing decisions: job relocations, growing families, or retirement.
Belmont’s appeal has remained consistent even as borrowing costs rise and fall, she said. But lower rates can still shape how buyers enter the market.
“When the rate dips, it increases demand massively,” said Shant Banosian, president of mortgage lender Rate. “You’ll see more competitive situations, more bidding wars, multiple offers, and quick closings.”
But, as more buyers flood in, the competition stiffens, making it harder for many to land a home.
“There is no firm rate per se. Rates change in real time, often throughout the day,” said Fred Allard, branch leader at Movement Mortgage.
Inflation, bond yields, and wider economic uncertainty all drive mortgage rates, Allard said. Those forces can push rates up or down multiple times in a single day.
Even small changes in rates can reshape what a buyer can afford. Decreased borrowing costs reduce monthly payments and boost buying power, opening the door to homes that were previously out of reach.
“In an area like Belmont, the average homebuyer this year can afford about $100,000 more house compared to about a year ago,” Banosian said. “Or for the same house, they can save around $600 a month in their monthly payment.”
That increase in purchasing power can change how buyers approach the market. Some may move into higher price brackets, while others may use the added flexibility to remain competitive in bidding situations.
As more buyers gain access to larger budgets, competition can increase, particularly in markets where supply remains limited.
“Many homeowners have locked-in mortgage rates around 3% or lower,” said Aida Parnagian, a real estate agent with Lamacchia Realty. “Those homeowners are reluctant to sell and take on a much higher rate. This keeps housing inventory limited, which supports home prices.”
This dynamic, often referred to as the lock-in effect, has thinned the number of homes hitting the market. Homeowners who locked in lower rates years ago are reluctant to sell and absorb a higher monthly payment on a new home.
“Mortgage rates don’t stop people from buying houses,” Parnagian said. “They just change what they can afford.”
Most prospective buyers adjust expectations rather than walk away. Some stretch their budgets, others widen their search to nearby communities, and many brace for bidding wars over the few available properties.
For some, however, no adjustment is enough. High home prices and tight inventory continue to put homeownership out of reach, particularly for first-time buyers and those on fixed incomes.
Belmont’s longstanding appeal only intensifies those pressures. Jenkins said those factors have made Belmont a consistent destination for buyers, regardless of short-term market changes.
“Belmont was mostly built out by the 1950s,” she said.
With limited land for new construction and a housing stock largely unchanged for decades, the town offers few opportunities to expand supply. While some new developments have been approved, none are large enough to meaningfully increase inventory anytime soon.
“We need listings,” Jenkins said. “We need sellers.”
Kallejhay Terrelonge is a journalism student in BU’s Newsroom program, a partnership between the university, The Belmont Voice, and other news organizations in the Boston area.