What does Rhode Island's housing market look like? 'It's a madhouse.'

Want to buy a house in Rhode Island? What about in that sweet spot of $340,000 to $440,000, the new median price for a single-family home?

Prepare for stiff competition, little inventory and an interest rate hovering around 7%.

"It's a madhouse, with 40 to 50 people showing up to open houses," real estate agent Constance Stowers said, referring to houses in the new mid-range price.

What does the data say? It's bad.

Data from the Rhode Island Association of Realtors released on Thursday shows:

• The median price for a single-family home stayed the same in March, for a second month, at $440,000

• That's down only a little from the peak last September, at $455,000.

• Houses are spending less time on the market, at an average of 31 days in March

• That's down from 38 days on the market in February, and 40 days in January

• The number of listings in March was up slightly, at 903

• That's more than the 822 in February, but still an incredibly tight market compared to what real estate agents consider healthy, and far less than the 3,600 or so in 2019, pre-pandemic.

• March's median price of $440,000 was up 66% from the pre-pandemic March 2019 median price of $265,000 for a single-family house.

"When you go and look at a property right now, you look at the history and it's almost hard to swallow that five years ago, it sold for $199,000, and now it's selling for $420,000, and it's worth $420,000," Stowers said.

Would-be buyers getting hit with one-two punch of prices, interest rates

First-time home buyers are being squeezed hard by a combination of drastically higher prices and increased interest rates.

Anyone who already owns a home, especially one bought in 2019 or before, is in a much better position than first-time home buyers because their current house has seen the 66% increase in home values, which increases equity even without paying a dime toward the principal on the mortgage.

The interest rate on the average 30-year mortgage is above 7% for the first time this year, according to the lender Freddie Mac. Interest rates hit their highest level in 20 years in October 2023 at 7.79%.

Multi-family, condo markets still way up

For multi-family houses, the rise in prices has been precipitous. Before the pandemic, the median price was often below that of single-family homes. Now, it's much higher.

• In March 2024, the median price of a multi-family house hit a new high, $535,000

• That's more than the previous high of $520,000 in February 2024.

• The median price has more than doubled since March 2019, up 109% from $256,000.

• The length of time a multi-family house sits on the market is down slightly, to 35 days in March

• That's fewer than the average of 43 days in February, which was way up from 25 days in January.

• The number of listings remains relatively stable, at 193 in March, up from 178 in February.

In the condo market:

• The median price rose to $370,000 in March.

• That's much higher than the $328,000 median price in February.

• The median price is up 62% compared to March 2019, at $228,500

• The number of listings in the condo market is also relatively stable, at 241 in March.

• That's fewer than the 269 listings in February, but the same number of listings as January.

How much could you buy, then and now?

In February 2019, the median price of a single-family house was $250,000. There were 2,769 listings and 534 houses sold. The interest rate was around 4.3%, leading to a mortgage payment of $1,237 a month. (At March's rate of 6.8%, that same payment would be $1,630.)

To put that mortgage payment of $1,237 into another context, a family would need to make $49,480 a year to not be housing-cost burdened, defined as spending more than 30% of their income on housing costs.

In March 2024, the median price was $440,000, there were 903 listings and 530 houses sold. The interest rate was around 6.8%, leading to a mortgage payment of $2,868. (At February 2019's rate of 4.3%, that same payment would be $2,177.)

To put the $2,868 mortgage into another context, a family would need to make $114,720 a year to not be housing-cost burdened.

Is there no end in sight?

With few, if any, new units, coming onto the market, Stowers said there is little relief in sight.

"People are saying something's gotta give," she said. "Maybe, maybe not."

Baby boomers continue to hold onto their large single-family homes and, even if they wanted to downsize to condos, cities and towns continue to try to block new condos from being built. With condo prices up so far, many people of that generation are unwilling to sell their big homes to pay so much for small condos, she said.

At the same time, people who bought a house in the last 10 years, especially a lower-cost starter home, want to upgrade to a bigger house, but there are few on the market and they carry significantly higher monthly costs because of interest rates.

Stowers said it will likely be another 10 years before more Baby Boomers (an age range of 60 to 78) downsize or are forced to leave their single-family homes.

"Anyone waiting for a correction, we're still 10 years out – if there will be one," she said.

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Reach reporter Wheeler Cowperthwaite at wcowperthwaite@providencejournal.com or follow him on Twitter @WheelerReporter.

This article originally appeared on The Providence Journal: Want to buy a house in RI? Prepare for stiff competition and scarce inventory.