Rising interest rates, low inventory pinch NY housing market

The New York housing market experienced a downturn in home sales during October, as revealed in the latest report by the New York State Association of REALTORS®.

This decline coincides with an increase in interest rates, which approached 8% for a 30-year fixed-rate mortgage according to Freddie Mac. Interest rates peaked at 7.79% and averaged 7.62% for the month, a significant rise from the 7.2% average in the previous month.

The report highlighted a continued decline in closed home sales, marking the 26th consecutive month of year-over-year decreases. October 2023 saw 9,733 units sold, a 13.9% drop from the 11,298 homes sold in October 2022. Despite this downward trend in closed sales, pending sales saw a slight uptick, increasing 3.5% to 9,693 homes compared to 9,364 in the same month last year. New listings remained relatively stable, with a marginal 0.1% decrease from 12,440 listings in October 2022 to 12,423 in October 2023.

The inventory of available homes in New York also saw a significant reduction, dropping 21.4% from 37,275 units in October 2022 to 29,316 in October 2023. In contrast, the median sales price of homes rose by 4.5%, from $359,000 in October 2022 to $375,000 in October 2023. These figures suggest a tightening market influenced by rising interest rates and a diminishing supply of homes, presenting challenges for both buyers and sellers in New York’s real estate landscape.