June 13, 2024

Historic Low in Long Island Home Listings Amid High Mortgage Rates

Long Island Home Listings Hit Historic Low Amid High Mortgage Rates

Long Island’s real estate market has seen an unprecedented plunge in home listings due to escalating mortgage rates. The area is witnessing record lows in listings, with Suffolk County experiencing its lowest end-of-month numbers since 1980 and Nassau County since 1983, as per OneKey MLS data. As of the end of December, Suffolk County had a mere 2,250 homes for sale, while Nassau County had just 1,735.

Homeowner Hesitation and Mortgage Rates

Homeowners are exhibiting reluctance to list their properties, wary of trading their current low mortgage rates for heftier ones. This trend has its roots in the sales boom of 2020 and 2021. However, the CEO of OneKey MLS, Richard Haggerty, is optimistic that the Federal Reserve’s recent hint at a potential interest rate cut this year may stimulate more listings.

Surging Home Prices

Despite the high mortgage rates, home prices have not ceased their upward trajectory, with Nassau’s median sale price touching $705,000, marking an 8.5% increase since last year, and Suffolk’s median price reaching $595,000, up by 9.6%. The average rate for a 30-year fixed home loan in December stood at 6.82%, a significant jump from the 3.1% rate observed two years earlier, but down from the October peak of 7.79%.

Buoyant Buyer Activity Amid Dwindling Inventory

The scarcity of inventory has not deterred buyers. Homes priced competitively are being snapped up swiftly. However, there was a noticeable dip in the number of closings in December, which dropped by 17% compared to the previous year, registering the lowest number since December 2011. Real estate agents have noticed a surge in buyer activity in January as mortgage rates begin to taper off, infusing hope into the housing market.

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