{"id":2081,"date":"2023-10-25T13:43:20","date_gmt":"2023-10-25T13:43:20","guid":{"rendered":"https:\/\/usecase.cubewp.com\/streetwise\/?p=2081"},"modified":"2023-10-25T15:31:45","modified_gmt":"2023-10-25T15:31:45","slug":"what-would-8-mortgage-rates-mean-for-the-nyc-sales-market","status":"publish","type":"post","link":"https:\/\/usecase.cubewp.com\/streetwise\/what-would-8-mortgage-rates-mean-for-the-nyc-sales-market\/","title":{"rendered":"What Would 8% Mortgage Rates Mean for the NYC Sales Market?"},"content":{"rendered":"
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Key Takeaways<\/div>\n<\/div>\n
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  1. Manhattan Sellers Are Holding Firm<\/li>\n
  2. New Developments Are Propping Up Sales Activity in Queens<\/li>\n
  3. Brooklyn Remained the Most Competitive Borough for Buyers<\/li>\n
  4. What Does This Mean for Buyers and Sellers?<\/li>\n<\/ol>\n<\/div>\n<\/div>\n<\/div>\n

    The average 30-year mortgage rate rose to 7.53% in the last week of September \u2014 the highest level since 2000 according to the\u00a0Mortgage Bankers Association. Although inflation has been cooling, the\u00a0resilience of the United States labor market\u00a0suggests mortgage rates could rise above 8% by November. While it\u2019s difficult to predict where rates will end up by the close of next year, there\u2019s no reason to expect a drop below 6% anytime soon.<\/p>\n

    With rising mortgage rates, sales activity in NYC dipped in September, with just 1,539 homes entering contract \u2014 a decline of 6.3% from a year ago. Nationally, our colleagues at\u00a0Zillow\u00a0expect competition for homes this fall to cool down unseasonably fast, swinging negotiating power toward buyers. However, New York\u2019s market slowdown this autumn will likely be milder than the one expected on the national level, as the city\u2019s severe shortage of newly listed homes will keep its sales market competitive. Many homeowners are locked into much lower mortgage rates than what they would get for their next home. This September, 4,051 homes entered the market for sale in NYC. That\u2019s 8.6% fewer than this time last year \u2014 an ongoing trend since summer 2022, though a slightly smaller dip than the national market (down 9.3% year-over-year) according to\u00a0Zillow.<\/p>\n

    \"\"<\/figure>\n

    With limited new listings, the\u00a0citywide median asking price\u00a0jumped 11.8% year-over-year in September to $1.095M \u2014 almost triple that of the national market, according to\u00a0Zillow data. With more expensive homes compared to the rest of the country, NYC has traditionally attracted buyers with larger budgets. Less deterred by elevated mortgage rates, these high-budget buyers are\u00a0doubling down on NYC. As a result, neighborhoods in Manhattan traditionally known for expensive homes continued to see the highest number of newly in-contract listings, with Lincoln Square and Lenox Hill leading the city in sales activity.<\/p>\n

    That said, NYC\u2019s sales market isn\u2019t impervious to changing mortgage rates, which will remain volatile for the foreseeable future. While far from guaranteed, should mortgage rates rise to 8%, more listings would become out of reach for home shoppers in the city. Buyers have already stretched their budgets at the current rate of 7.53%, which puts monthly mortgage payments at $6,143 for a median-priced NYC home with a 20% down payment. At 8%, the monthly payment on the same home would rise by $285 to $6,428, shrinking the pool of would-be buyers who can\u00a0afford to stay in the market\u00a0\u2014 and pressuring NYC sellers to reduce asking prices.<\/p>\n

    New Developments Are Propping Up Sales Activity in Queens<\/h2>\n

    In Queens, 337 homes entered contract this September, up 1.2% from a year ago. Steady sales activity in the borough despite increasing mortgage rates may be due to a higher number of listings at more affordable price points, as rising rates limit buyers\u2019 options in other boroughs. While the median asking price in Queens rose 3.3% to $639,500 in September, it\u2019s still far lower than that of Brooklyn ($1.1M) and Manhattan ($1.6M). However, fewer homes are entering the market in Queens than other boroughs. Compared to last year, 18.2% fewer homes were listed in Queens in September, with many homeowners locked into much lower mortgage rates than today\u2019s.<\/p>\n

    New developments in Queens are contributing to the borough\u2019s steady inventory levels despite the high number of rate-locked homeowners. Since the pandemic, 18,249 new units have been added across 1,120 newly constructed buildings in Queens, according to the\u00a0NYC Department of City Planning. That\u2019s 12% more than the number of new homes built before the pandemic between 2017 and 2019. The recent building boom has resulted in a rising market share of condos in the area: year to date, 1,625 condo listings have joined the Queens market, making up 26.2% of all new listings in the borough. This is an increase from 20.1%, the three-year average for this number between 2017 and 2019. Furthermore, half of all new condo listings in Queens so far this year were\u00a0sponsor units<\/a>\u00a0in brand new buildings.<\/p>\n

    \"\"<\/figure>\n

    With fewer listings coming from homeowners,\u00a0buyers turned to new developments in Long Island City, which accounted for 31% of all sponsor units in Queens this year. As a result, Long Island City shared the third spot with\u00a0Forest Hills\u00a0as the neighborhood with the most contract signings in September. In total, 38 homes entered contract in Long Island City, up from 24 homes one year ago. Of these 38 homes, 30 were sponsor units with a median asking price of $1.168M, a 46% increase from a year ago.<\/p>\n

    With 31 homes entering contract in September,\u00a0Flushing\u00a0scored the fifth spot among NYC neighborhoods with the highest number of newly in-contract listings. New buildings also dominated the local sales market in this Queens neighborhood: about 42% of all homes in Flushing that entered contract in September were sponsor units, a sharp increase from just 7% a year ago. Overall condo listings in Flushing jumped 73.5% year-over-year in September to 262, expanding the options for buyers to consider.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Key Takeaways Manhattan Sellers Are Holding Firm New Developments Are Propping Up Sales Activity in Queens Brooklyn Remained the Most Competitive Borough for Buyers What Does This Mean for Buyers and Sellers? The average 30-year mortgage rate rose to 7.53% in the last week of September \u2014 the highest level since 2000 according to the\u00a0Mortgage […]<\/p>\n","protected":false},"author":1,"featured_media":2082,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[223],"tags":[],"class_list":["post-2081","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-leadership"],"cubewp_post_meta":[],"taxonomies":["Leadership"],"_links":{"self":[{"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/posts\/2081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/comments?post=2081"}],"version-history":[{"count":0,"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/posts\/2081\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/media\/2082"}],"wp:attachment":[{"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/media?parent=2081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/categories?post=2081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usecase.cubewp.com\/streetwise\/wp-json\/wp\/v2\/tags?post=2081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}