The Boston North Shore housing outlook continues to remain positive. The Commerce Department released information confirming that the sales of newly built homes rose more than 5% in July. In addition, prices for new homes were up. Homebuilders cite two reasons for the recent higher traffic and sales activity:

1.) The much anticipated rate increase by the Federal Reserve

2) Lower new construction home prices to more closely match mortgage demand

Metro Boston North Shore Housing Market Could Cool Down

Despite this summer’s success, some analysts warn that recent market volatility may be creating a slowdown in the Boston North Shore housing market. Some homebuilders aren’t quite as bullish on the remaining months of 2015.

The recent instability in the global economy — specifically China’s stock market woes — has made the expected rise in the Federal Reserve’s federal funds rate less likely. While on the surface that’s a good thing, Boston North Shore housing experts fear the lack of movement in rates will result in a reduced sense of urgency in prospective homebuyers.

Home prices have remained relatively high, too, buoyed in part by the regained consumer confidence in the stock market after a shaky week following China’s record market plummet. Despite expected rates remaining unchanged, homebuilders say consumer caution will trump interest rates.

Ironically, a rise in interest rates would potentially have given the Boston North Shore housing market a boost. Historically, such an event signals an end to the “good old days” as homebuyers move to finally purchase before rates increase further.

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