T
he Rhode Island real estate market is experiencing a surge in demand, with the median sales price of single-family homes reaching $485,000 in October, a 11.5% year-over-year increase. However, first-time home buyers are facing stiff competition from cash buyers and those tapping into their equity or 401K to secure properties.

    "We're seeing homeowners who are competing with first-time home buyers without those luxuries," said Chris Whitten, president of the Rhode Island Association of Realtors. "It's tough for younger buyers to compete with that." Down-payment assistance programs offer some relief, but lack of inventory, higher prices, and interest rates remain significant barriers.

    The condo market offers a glimmer of hope, with a 15.1% increase in sales and a $25,000 drop in median sales price to $355,000. However, the state's inventory remains limited, with condos selling at an alarming rate: all available units would be sold in just over two months if no new listings went on the market.

    The supply of single-family listings has increased by 4.9%, but economists consider a healthy market to have at least a five-month supply. Buyers may turn to multifamily homes, which saw a 17.2% increase in closed sales last month, with a median price hike of 16.06% to $560,000.

    Prices vary across counties, with Kent County experiencing a nearly 17% increase and Providence County seeing a 6.03% drop. The average rate on a 30-year fixed mortgage has hit its highest level since July at 6.84%, further sapping buyer power.