Today, some Boston residents who have lived in a community for years or even a lifetime, or who work for city government (which requires most employees to be city residents), are finding that they cannot afford to purchase a home in Boston.  Likewise, newcomers to the city — whether recently recruited professionals or newcomer immigrant families — are experiencing sticker shock at local housing prices.

How are we doing?

In Boston in 2000, 79% of households could not afford the median priced single-family home at $216,000.  Since then, prices have risen in all Boston neighborhoods, with the greatest percentage increases occurring in traditionally lower-income neighborhoods.

During the “bubble market” of 1990, 83% of Boston households could not afford a median priced single-family home — then priced at $139,525.

While median home prices increased from 1990 to 2000, lower mortgage interest rates moderated the monthly mortgage interest payments.  From 1990 to 2000, mortgage rates fell from 10.08% to 8.5%.   In 2001, the average rate was 6.97%.   In 2002, mortgage rates hit the lowest level since 1965 — reducing monthly payments considerably.  By 2004, interest rates had climbed back to more than 6%.