Challenging Trends, Challenging Times

According to the latest data from the Rhode Island Association of Realtors®, a single policy change had a major impact on recent market activity. After year-over-year declines in July and August, single-family home sales jumped 19.5% in September compared to September 2024.

While several factors contributed—including a strong stock market, increased home equity, and slightly lower mortgage rates—the Association pointed to one primary driver:

The significant hike in the state conveyance tax enacted on October 1.

To illustrate, sales dropped 31% in the two weeks following the October 1 deadline compared to the same period last year.

Understanding the Conveyance Tax Increase

This tax increase represents a 63% hike, placing a heavier burden on home sellers.

• Before October 1: A $900,000 home sale was taxed at $4.60 per $1,000 up to $800,000 and $9.20 per $1,000 above that, totaling $4,680.
• After October 1: That same sale now costs $7,500 in conveyance tax.
  

Realtors® across Rhode Island have voiced strong concern about the impact of this increase on both sellers and overall market activity.

Prices Rise, Inventory Remains Tight

The median sale price of a single-family home in Rhode Island rose 9.3%, and inventory remains low with just 2.8 months of supply—well below the six months that indicate a balanced market.

In short, Rhode Island continues to be a strong seller’s market heading into the winter months.

Affordability Challenges Deepen

The RI Housing Fact Book, published by HousingWorks RI at Roger Williams University, highlights an ongoing affordability crisis:

• Wages have grown less than 30% since 2018
• Housing costs have surged over 60% in that same period

“More recently, Rhode Island’s single-family home prices have jumped higher and faster than anywhere else in the country, and rental increases are currently the steepest in New England,” the report stated.

Mortgage Update: A More Predictable Market

One local mortgage professional shared:

“We’re seeing more stability than movement right now. Rates aren’t setting new lows, but they’ve also held firm instead of breaking higher despite mixed economic data. For buyers, that stability means we’re entering a more predictable environment heading into the winter market.”

This period of rate stability may give buyers a window to act with greater confidence as we close out the year.

Katy’s Takeaway

Buying and selling real estate in Rhode Island and Massachusetts continues to present unique challenges—from rising prices and limited inventory to new tax burdens.

PRO TIPS:

For buyers: With rates holding steady, this is a good moment to shop with more predictability. Post–October 1 slowdown means some homes may see fewer competing offers—especially listings that have been on the market a bit longer. Act quickly on well-priced properties before winter tightens inventory further.

For sellers: Buyer demand has cooled slightly, but serious, qualified buyers are still active. With prices up and inventory low, accurate pricing and strong presentation from day one are essential. Lean on your agent’s strategy to stand out in a market shaped by rising costs and increased selectivity.

Now more than ever, it’s essential to partner with an experienced real estate professional who understands local market dynamics. We’re here to help you navigate every step. Let’s connect and talk about your next move. Contact us today for expert advice and personalized support.

Katy Donovan is the Broker/Owner of Homes By Connect and The Donovan Group in Portsmouth, Rhode Island.

Data Points provided by the Rhode Island Association of Realtors®.