Mortgage rate drop brings NYC buyers back
New York City welcomed in the new year by welcoming house hunters back to their streets, enticed by a favorable turn in mortgage rates.
Inquiries into for-sale listings on StreetEasy surged 21.7 percent from December to January, according to a report from the listings giant. The bump was lower than last year’s from the same period, but was still one of the best in a decade.
Only a few months ago, the average 30-year mortgage rate made a historic climb past 7 percent. Since then, however, rates have cooled to around 6.1 percent in January, giving buyers a chance to jump back into the fray after being sidelined for much of last year.
Slipping borrowing costs from November to January handing the average buyer around $83,000 more to play with in their budgets.
Increased buying power unlocks more options for would-be buyers. The inventory of options within those budget parameters increased by 10 percent across the city last month. In Manhattan, for instance, hunters for one- and two-bedroom apartments suddenly had 12.5 percent more homes available within their budgets.
It’s not all good news for buyers, though: inventory remains limited, which could make for an extremely competitive spring shopping season.
Reluctance to list homes remains as those who still don’t want to sacrifice low mortgage rates. In January, new listings fell 12.7 percent year-over-year. In December, they fell even more, 24.3 percent year-over-year. If mortgage rates continue to stabilize or decrease heading into the spring, competition and bidding wars could run rampant across the city.
That would be to the benefit of sellers, who may be able to make up some of that mortgage rate disparity by garnering higher sale prices on their homes. Sellers may also be able to move their properties faster due to increased competition.
Any decline in home prices this spring will be gradual, the report forecast. The company’s index dropped 0.5 percent from December to January, but remains 2.1 percent above last year’s level. The median sales price last month was $624,000 — in Manhattan, it was over $1 million.