Skyrocketing prices and creeping mortgage rates are hurting home sales, but brokers in New York are expecting business to pick up again with the cooler weather.
Contracts on previously-owned houses had their biggest drop of the year in July — 1.3 percent, according to the National Association of Realtors; the annual increase in home prices is in the double digits for both the city and the country’s other expensive markets, Bloomberg News reported.
“You can’t sustain annual price growth in excess of 12 percent when income is flat, credit is tight and unemployment is elevated,” Jonathan Miller of Miller Samuel told the news service. “Those are boom price trends.”
Mortgage rates nationwide jumped by a full percentage point in only a month; New York is the third most at risk from the spike among major metropolitan areas, data from Barclays Plc showed last month.
For Peter McMahon, a broker for Redfin on Long Island, the numbers show that some prospective buyers are putting their house hunting on hold for a few weeks. He expects that his clients will resume their search in the fall when there could be less competition. [Bloomberg News] – Mark Maurer