Buying a home in Boston: prices, property tax and city help

#Owners and renters in Boston

Boston is a city of renters: 35.9% of occupied homes are owner-occupied, against 62.4% across Massachusetts — the third-lowest homeownership rate among the 20 large cities this site covers. The median Boston home costs 7.4 times the median household income, against 5.8 statewide and 4.4 nationally, and Boston’s median income is lower than the state’s.

#The age of Boston’s housing

Boston has the oldest housing of the cities on this site: the median home was built in 1947, 34 years before the national median of 1981. Condos in converted row houses and two- and three-family houses — common forms of older Boston housing — are all eligible for the City’s buyer programs.

Age changes what you should budget for. Plan a thorough inspection that looks at the heating system, wiring, roof, foundation and windows, and set money aside for repairs in the first years. Homes this old often contain lead paint; Massachusetts law makes owners responsible for removing lead hazards when young children live in the home, so ask for any lead inspection records before you buy. In a condo, read the association’s budget and reserve study, because an aging building’s big repairs are shared among owners.

#What the median Boston home costs a month

Test other prices and down payments in the mortgage payment calculator.

#The residential exemption

Boston’s effective property tax rate of 0.62% is lower than the Massachusetts figure of 1% and below the national 0.89%. For owner-occupants, the City’s residential exemption lowers it further: in the last fiscal year it cut qualifying owners’ bills by up to $4,353.74, about $363 a month. You qualify for one property that you own and occupy as your principal residence, and you must apply — Boston’s Assessing Department publishes each year’s deadline. The payment example above uses the citywide average rate; if you buy and move in, ask your lender to estimate your escrow with the exemption applied once it is approved.

#Boston Home Center buyer programs

The Boston Home Center, part of the Mayor’s Office of Housing, runs the City’s purchase programs for one- to three-family homes and condos in Boston that you will live in. You must be a first-time buyer (no home owned in the past 3 years), complete the Center’s Homebuying 101 class, get pre-approved with a participating lender and meet income and asset limits.

Current Boston residents receive the help as a grant. Buyers moving in from outside the city receive it as a 0% deferred loan, repaid when they sell, refinance or transfer the home. ONE+Boston, run with the state’s housing partnership, adds a discounted fixed rate on a 30-year mortgage for eligible first-time buyers.

#Deeds excise and cash to close

Massachusetts charges a deeds excise of 0.456% of the price when the deed is recorded — about $3,296 on a home at Boston’s median value. Check the purchase and sale agreement for which side pays it. Lender fees, title insurance, attorney fees and prepaid items make up the rest of closing costs; the closing cost calculator uses Massachusetts rules. The Massachusetts guide covers MassHousing loans that can be combined with City help.

#How far a Boston income goes

The median Boston household earns $97,791. At Freddie Mac’s 30% housing guideline that is $2,445 a month, enough for about $326,000 with 10% down at today’s average rate — $396,800 short of the median value. The affordability calculator tests your own income and debts, and the rent vs buy calculator compares buying with the median rent of $2,196. For other East Coast markets, see Washington, DC and New York City.