What the Fed’s May 2025 Decision Means for Real Estate in South Shore, Hingham, Boston & Cape Cod

On May 7, 2025, the Federal Reserve announced it would hold interest rates steady at 4.25%–4.5%. While this move wasn’t unexpected, it sends a clear signal to the real estate market across Massachusetts—from Boston condos to South Shore colonials and Cape Cod vacation homes.

So, what does this mean if you're planning to buy, sell, or invest?

Mortgage Rates Stay High—For Now

Despite some early spring optimism, mortgage rates are still hovering around 6.84% for a 30-year fixed loan. The Fed’s decision to “stay put” on rates makes it unlikely we’ll see dramatic rate drops anytime soon. For buyers in Hingham or down the Cape, that means budgeting for higher monthly payments unless rates ease later in the year.

Affordability Remains a Challenge

Buyers on the South Shore and in Greater Boston are feeling the pinch. With higher interest rates and sustained home prices, monthly payments continue to stretch budgets. This can delay purchases or push buyers into more affordable markets like the outskirts of Plymouth County or inland Cape towns.

Inventory Is Slowly Rising—but Still Tight

We’re finally seeing a slight increase in homes for sale. Inventory levels rose to a 4-month supply nationally, but locally in towns like Cohasset, Scituate, and Barnstable, listings remain below the 5-6 month range that would indicate a balanced market. Many homeowners are staying put, locked into sub-4% mortgage rates from the past few years.

Prices Are Still Holding Strong

Despite slower buyer activity, prices across Hingham, Boston, and Cape Cod haven’t dropped much. In fact, national data shows the median sale price hit $403,700 in March 2025—marking nearly two years of steady year-over-year growth. In desirable markets like Beacon Hill or waterfront Cape properties, that trend holds true.

What This Means for Buyers, Sellers, and Investors

• Buyers: If you’re house hunting in South Shore or Cape Cod, now is the time to be strategic. Partner with a savvy agent, get clear on your numbers, and stay alert for well-priced listings. Patience and preparation matter more than ever.

• Sellers: With less competition on the market, listing now—especially if your home shows well and is priced correctly—could attract serious buyers who are eager to lock in before summer.

• Investors: Watch for emerging opportunities, especially in multi-family properties or off-market deals. The current climate favors investors who can move quickly and see beyond short-term rate fluctuations.

The Bottom Line

The Fed’s decision to hold rates in place is a reminder: this isn’t a boom or bust market—it’s a smart market. Buyers and sellers who adapt, stay informed, and act with the right strategy can still win.

Have questions about buying, selling, or investing across South Shore, Hingham, Boston, or Cape Cod? Let’s talk. Our team at The Charles King Group is here to help you navigate this evolving market with confidence.