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Rhode Island
First-time home buyers struggle as cash dominates R.I. market
Real Estate
“We’re seeing homeowners who are tapping into their equity and 401K and competing for properties with first-time home buyers without those luxuries.”
The median sales price for a single-family home in Rhode Island hit $485,000 in October, a 11.5 percent year-over-year jump, the state realtors association reported on Nov. 21.
Rhode Island saw more sales (up 5 .4 percent) and more homes to choose from (inventory was up 4.9 percent), but first-time home buyers are having to do battle with shoppers armed with cash or equity.
“We’re seeing homeowners who are tapping into their equity and 401K and competing for properties with first-time home buyers without those luxuries. Many are cash buyers who are downsizing or buying a second home,” Chris Whitten, 2025 president of the Rhode Island Association of Realtors, said in a news release. “It’s tough for younger buyers to compete with that. Down-payment assistance programs help slightly, but lack of inventory, higher prices, and interest rates are still the biggest pain points preventing our younger generations from starting to build equity through homeownership.”
On Nov. 21, the average rate on a 30-year fixed mortgage hit its highest level since July, 6.84 percent, sapping the buyer power of prospective shoppers.
But the condo market offers buyers hope. The median sales price of $355,000 in October reflects a $25,000 drop in costs compared to October 2023. This led to a 15.1 percent hike in sales, the association reported.
There are more condos on the market as well, which helps to temper competition. The state saw a 37.3 percent increase in inventory, but it’s not enough to meet demand.
“At the current rate of sales, all the condominiums available for sale in Rhode Island would be sold in just over two months if no new listings went on the market,” Whitten said. “The condo market is attractive to first-time buyers due to its lower price point, but more development is the key to help get younger generations into homeownership.
“The net worth of a homeowner is $415,000 compared to $10,000 for a renter,” he added. “In the coming legislative session, RI Realtors will be focused on working closely with legislators who are willing to help remove barriers to building and enable the creation of more homes here in the Ocean State.”
The supply of single-family listings rose as well, by 4.9 percent for a 2.1-month supply. Most economists agree that a healthy market has at least a five-month supply.
Buyers may also turn to multifamily homes to pay their mortgage. Closed sales in that market were up 17.2 percent last month, with a 16.06 percent increase in the median price to $560,000, the association reported.
The typical multifamily home spent 26 days on the market before selling, while condos took 33 days and single-family homes were snapped up after 31.
Single-family properties in Kent County — home to Coventry, East Greenwich, West Greenwich, Warwick, and West Warwick — saw the biggest increase in prices, nearly 17 percent. Prices dropped in Providence County, home to the capital city, fell 6.03 percent.
