The number of homes sold across New York fell nearly 11% in the past year, a sign that mortgage rates near 7% are spooking would-be buyers, the state's realtor association said.
The Empire State sold 7,846 homes last month compared to 8,807 in May 2024, according to a report the New York State Association of Realtors released Monday. Pending sales also dipped 1.4% from 10,421 in May 2024 to 10,279 last month.
The sales drop comes even as the number of homes on the market in New York has grown for three months straight, according to the report.
"Elevated mortgage rates have definitely played a part in sales being down this month," Jacqie Rose, association president and an agent with Coldwell Banker Timberland Properties, told Homes.com in an email. "But other factors, such as not having the time to shop because things like school events winding down and sellers preparing their homes to go on the market for the summer season, have contributed as well."
Mortgage rates play a big role in how much homebuyers must pay monthly on their home loans. An uptick of just a few percentage points can add hundreds of dollars.
As of Thursday, the 30-year, fixed-rate mortgage was 6.77% on a weekly basis, according to mortgage giant Freddie Mac, which buys loans from banks, bundles them into securities, and sells them. It's a decrease from the previous week. For 11 weeks now, the 30-year, fixed-rate mortgage has bounced between 6.76% and 6.89%, shackled by rampant uncertainty permeating markets and affecting investor and borrower decisions.
Inventory climbs but competition remains heated
Housing economists have said this year's homebuying activity will largely depend on how high mortgage rates climb.
The New York association's report said home inventory rose 3.6% statewide from 27,806 in May 2024 to 28,810 last month. Real estate agents across the state told Homes.com that they have noticed new properties popping up in their areas. Parts of southern Dutchess, Orange, and Ulster counties have new housing underway, "but it's very relatively limited," said Dan Staley, an agent at Staley Real Estate in Rhinebeck.
"We are starting to see more infill and suburban new construction developments across Monroe County, particularly in Greece, Webster, and Penfield," Cassie Haller, an agent for Keller Williams in Rochester, said in a statement. "Some of these projects offer townhomes or low-maintenance single-family homes — attractive options for downsizers or first-time buyers looking for something turnkey."
But inventory isn't the only thing rising in New York's housing market. The state's median sales price rose 3.8% from $420,000 in May 2024 to $436,000 last month. The association said that's the 22nd straight month of price increases.
Prices are increasing mostly because demand is skyrocketing, agents said, and even the most ideal buyers are struggling to find a home.
"I had a buyer that over a two-year period made a dozen over-list-price offers, with $100,000 down and nothing to sell, and kept getting outbid," Ron Garafalo, an agent with John J. Lease in Middletown, told Homes.com. "They finally did get an offer accepted, but it took two years. Some buyers in that situation have stopped looking."