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Higher mortgage rates haven’t cooled LI housing market

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The Long Island housing market showed little sign of a recession in March, even though mortgage rates recorded the fastest three-month rise since 1987.

Mortgage giant Freddie Mac said the 30-year fixed mortgage average interest rate reached 5% for the first time this week since February 2011, making it a high borrowing list for long island buyers already facing home prices. Added cost Close to record highs, shortage of homes for sale.

The median home sold in Nassau County last month was $ 650,000, 8.3% higher than the median for March 2021. In Suffolk, the median selling price was $ 530,000, up 12.8% from the previous year. Thursday, by OneKey MLS, a multiple listing service covering Long Island. House prices have remained relatively static since the fall.

The number of homes sold on Long Island fell 18% in March year-over-year, reflecting a lack of listings.

Jim Speer, CEO of OneKey MLS, shows that pending sales since March are a more up-to-date indicator than financial results, showing that rising interest rates haven’t slowed the local housing market yet. During the month, the average interest rate on 30-year fixed-term mortgages rose almost a complete percentage point from 3.76% to 4.67%, according to Freddie Mac.

Last month, there were 1,694 pending sales in Suffolk County, and the deal was signed, but not yet. This was 0.6% higher than in the same month of 2021, even with fewer homes on the market. This was the first year-over-year increase in pending sales in Suffolk in almost a year. Nassau has 1,345 pending sales, down 8% from March 2021 but up from the last few months.

“At this point of time when inventory is very low and demand is very high, it’s very difficult to determine when we might be in the market,” Speer said of the high rate. “Some people think the market will start to slow, but it’s not. It’s hard to really tell when or when it will happen,” he said.

Unusually low inventories are intensifying competition among buyers. There were 4,932 homes in the March market, an improvement of 8.6% from February, but nearly 20% less than the homes available to buyers in March 2021. It is about 18% in both counties.

Korinov, an associate broker for the Hulknov team at Oceanside Compass, said the number of new listings on Oceanside in the last four weeks was the highest in the last four weeks. “But it doesn’t matter because the number of signed contracts was still within one or two of the lists that came out,” she said. “We haven’t increased our inventory yet. We’re just selling more.”

Knopf said he didn’t think higher interest rates would lower prices, but saw it affect behavior. Buyers who were looking at homes of about $ 800,000 last year, whose interest rates fell by about two points, are now targeting homes in the $ 700,000 range, she said.

“There are so many buyers who want a home, so I think it’s a shift in which buyers bid on which home,” Knopf said.

Others say higher rates may precede the end of the era of rampant bid wars. Zahra Jafri, president of Westbury’s Lynx Mortgage Bank, said a two-point increase in short-term mortgage rates would affect the amount a buyer could spend.

“We still don’t know that house prices haven’t fallen yet, but that will ultimately be the result,” she said.

Nationally, real estate agent Redfin is showing signs of softening demand, with online searches for “homes for sale” down 3% and mortgage purchase applications down 6% from a year ago. increase.

“The market has seemed endless over the past few years, but homebuyers’ demand is really limited,” Seattle-based Redfin Chief Economist Darryl Fairweather said in a statement. “The sharp rise in mortgage rates is pushing more homebuyers out of the market, but it also seems to discourage some homeowners from selling. With both depressed, it is unlikely that the market will soon change from a seller’s market to a buyer’s market. ”

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