Worcester Business Journal

wbjournal.com | September 18, 2023 | Worcester Business Journal 21 Mortgage rates are heading modestly lower V I E W P O I N T E D I T O R I A L T hirty-year fixed mortgage rates have risen more than 260% since the year 2020, when the year ended with an average rate of 2.67%, according to national mortgage firm Freddie Mac. Today's average mortgage rate is 6.96%, which may seem high compared with 2020's historically low rate, but it's still below the average of 7.74% from 1971 to the present. ose who need a mortgage can be thankful it's not October 1981, when the average rate reached 18.53%. But what can we expect moving forward? Experts believe mort- gage rates will fall moderately in coming months. • Fannie Mae's July Housing Forecast predicts the 30- year fixed mortgage rate will drop to 6.6% by the end of 2023 and 5.9% by the end of 2024. • e National Association of Realtors expects the 30-year fixed rate will fall to 6.0% by year's end and 5.6% in 2024. • Bank of America Global Research predicts rates will drop to 5.25% by year's end. • e Mortgage Bankers Association forecasts that rates will be close to 5.5% by the end of 2023 and will drop a little lower next year. For someone with a $500,000 mortgage, a decrease from 6.96% to 5.25% would drop monthly mortgage payments by $552. Such a drop could not only make housing affordable to more people, it would enable po- tential homebuyers to buy more expensive homes. It could boost housing sales, which have fallen as rates rose. Many homeowners who want to move are reluctant to sell their existing home, because they would have to assume a higher rate on their new home. Sales of existing homes fell 18.9% in June from a year earlier. Housing prices typically rise when mortgage rates fall, and fall when rates rise. But the modest predicted rate decrease may have little impact on prices, which have remained high as rates have risen. e national median housing price fell 0.9% in June from a year earlier to $410,200, but even that small drop is little consolation to anyone seeking to buy a home in Mass., where the median price for a single-family home rose from $615,000 a year ago to $616,450 in May 2023, according to the Massachusetts Association of Realtors. Prices remain high, in part, because Millennials have reached the age where they are buying homes. is gen- eration of 72.4 million outnumbers Baby Boomers. While demand for housing is high, supply is not keep- ing up. e number of new listings fell 26% in June from a year earlier, according to Realtor.com. Inventory is low, not only because existing home- owners are reluctant to sell, but because it's become difficult to build new homes. COVID drove the price of lumber and labor higher. Restrictive zoning and unavailability of buildable land have contributed to a lack of inventory. Cheryl Eidinger-Taylor is the president and chief operating officer of ERA Key Realty Services, based in Northbridge. BY CHERYL EIDINGER-TAYLOR Special to WBJ A T H O U SA N D WO R D S B Y R A M Ó N L . S A N D O V A L Fitchburg's economic momentum is picking up steam Cheryl Eidinger- Taylor T he City of Fitchburg and key community players like Fitchburg State University have been talking about revitalizing downtown for years. Plans included redeveloping the eater Block, partnering with the Fitch- burg Art Museum to bring more cultural vitality to the area, building artist-oriented housing, and re-opening Fitchburg City Hall, whose dilapidated condition forced it to be deemed unsafe for use in 2012. Like so many other communities with revitalization plans centered around downtown, it was an open question whether any of this talk and planning would become reality. Fast forward to 2023, and it appears the pieces are coming together for Fitchburg's downtown reinvention. e $24-million renovation of Fitchburg City Hall was completed in 2021, creating a gorgeously modern office setting inside an historic building. While some voters might scoff at spending eight figures on government of- fices – especially in a Gateway City like Fitchburg – the modern City Hall sends a clear message to any business or individual thinking about investing in the North Central community: Fitchburg is indeed on the rise. FSU has slowly been chipping away at the eater Block development, using its own funds and getting outside support, such as $3 million from the state in 2022 to prepare the theater to reopen. Short of the the- ater's restoration, the block is already becoming a center for learning and entrepreneurialism, as FSU has opened the IdeaLab in the space and has a new game design studio, where students create video games and prepare to enter the exciting technology field. And – of course – no neighborhood revitalization would be complete without the influx of exciting places to eat, so it's good to see locally owned eateries offering good food to attract outsiders. e Pauper's Pantry, which features twists on comfort food, and Mamajuana Restaurant, offering Latin American food, opened on Main Street this summer. ose came aer Dario's Ris- torante and Rise & Grind Cafe opened in the spring. Amid all this flurry, the North Central Massachusetts Chamber of Commerce – a key driver of the business community – was named national Chamber of the Year by the Association of Chamber of Commerce Executives, the first chamber in New England to win the honor. On top of advocating for businesses and bringing people together, the chamber has been a key small business lender through its North Central Massa- chusetts Development Corp., which provides favorable loans to businesses struggling to get financing. Fitchburg, the third largest city in Worcester County with a population of 41,500, is helped by having rela- tively low housing prices. Year-to-date, the median sales price for a single-family home is $350,000, compared to $565,000 statewide, $436,750 in neighboring Leomin- ster, and $383,250 in Worcester, according to the War- ren Group. And since Route 2 provides a direct artery from Fitchburg into Boston, Fitchburg is positioned as an affordable urban alternative to those fleeing skyrock- eting prices, especially in Eastern Massachusetts. Fitchburg still has boxes to check off on its redevelop- ment plans, but it's worth noting all that has been accom- plished, along with the promise of future growth. The above Editorial is the opinion of the WBJ Editorial Board. The Viewpoint column, the A Thousand Words cartoon, and the Word from the Web commentary represent the opinions of their authors and do not necessarily reflect the views of WBJ or its staff. WBJ welcomes letters to the editor and commentary submissions. Send them to bkane@wbjournal.com. W W

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