Home News LI home prices dip from record highs as mortgage rates take toll

LI home prices dip from record highs as mortgage rates take toll

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Long Island home prices fell below record highs set earlier in the summer in August, but the number of homes on the market is also down, helping the market to favor sellers in the fall. It suggests that it is possible to

Last month’s median sales price in Nassau County was $700,000, $20,000 below the record set in June and matching July’s. Still, the median is 4.5% higher than in August 2021, according to new data OneKey MLS released Tuesday.

In Suffolk, median sales were $565,000, $10,000 lower than the record price set in July.

While prices continue to rise compared to the previous year, the rate of increase in both counties was the lowest since July 2020, when the end of the first wave of the pandemic led to a real estate boom.

The median number of sales that were closed but not yet closed last month was lower than the number of closed sales. The median pending sale in Nassau last month was $660,000, putting him 1.5% above the same figure in August 2021.

OneKey MLS CEO Jim Speer said: “It’s the third month in a row that he’s seen contract selling prices drop slightly in both Nassau and Suffolk, and I believe this is more than just seasonality.”

Significant increases in mortgage interest rates have made Long Islanders more expensive to purchase and have dampened sales. The average 30-year fixed mortgage interest rate was 5.22% in August, compared to 2.84% in August 2021. Since then, according to mortgage giant Freddie Mac, the average interest rate has risen to 5.89% as of Sept. 8.

“Between interest rates and inflation, I think buyers will pause how much they’re offering for homes, and sellers will be more realistic that they won’t get a higher price.

The number of homes sold in August decreased 17.4% to 1,349 in Nassau and 8.2% to 1,645 in Suffolk compared to August 2021.

While 2021 home sales have lagged the pace, Speer said deal values ​​have improved in recent months. The number of store closures in Nassau was the highest since last October.

These sales were enough to deplete the number of homes on the market and keep homebuyers competitive. % decreased. This is the end of a six-month streak of rising inventories after a record low listings in January.

A shortage of homes for sale keeps prices high and forces buyers to compete with each other. At the rates the homes signed last month, it will take him 2.2 months in Suffolk and 2.6 months in Nassau to sell existing inventory. It usually takes five to six months from supply for a more balanced negotiation between buyers and sellers.

“We didn’t have enough inventory to cover that demand,” says Speer. “Demand will be there because inventories are kept low. This means the market remains strong and we don’t see the severe recession that some people are talking about. It should be.”

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