A tale of two boroughs: Manhattan, Brooklyn diverge on affordability

Everything is relative, and that’s especially true for aspiring homeowners in Manhattan.

It may be New York City’s priciest, but Manhattan was the sole borough in the quarter whose home-buying affordability improved over the past year based on median price, according to a TRD Data analysis of third-quarter housing data from Attom. It was also the only borough whose affordability was below its historical norm.

Of course, buyers still needed to earn an annual income north of $360,000 just to afford the typical home on the island; the median household income there is $106,000. Manhattan buyers also had to drop at least 60 percent of their salaries — more than twice the recommended amount — on major home-buying costs.

Still, this was lower than what Manhattan purchasers historically have had to cough up — some 73 percent of their yearly salaries. Only one other borough, Staten Island, required owners to spend a smaller share on costs for a median property in the third quarter.

This line chart shows Attom’s Affordability Index, which is based on the percentage of average wages needed to pay for costs like mortgage payments and insurance on a median-priced home, over time in the five boroughs. But it’s a bit deceiving: points above the shaded area reflect times when a borough was more affordable than its historical norm.

As shown in the graph, Manhattan is the only borough whose affordability has been better than its norm since 2022.

Manhattan also was the sole borough whose median home sales price dropped in the third quarter year over year. However, it bears reminding that everything is relative: the typical price for a home in the borough — a cool $1.5 million — was the highest in the city and the third-highest in the country.

Meanwhile, the Big Apple borough that showed the starkest affordability challenge in the third quarter was Brooklyn. Buyers needed to spend 113 percent of their salaries — in other words, more than what they make — to pay for the costs of owning a typical home. This percentage was the highest among the 580 counties Attom analyzed in the quarter.

Per Attom’s Affordability Index, Brooklyn recorded the greatest drop in its affordability rating year over year.

In the New York metropolitan area in August, almost 18 percent of homes sold for less than what sellers were asking for, the smallest share among the most populous markets in the country. Meanwhile, almost a third of deals went above ask, the fourth-highest share.

Brooklyn in particular has seen price records and bidding wars in recent months, especially for trophy brownhouses. Meanwhile, Manhattan has seen a softening of its luxury and ultraluxury markets, in part because of seasonal trends.