The Long Island housing market continues to be slowed by a dearth of inventory and higher mortgage rates.
There were 2,521 homes contracted for sale in Nassau and Suffolk counties last month, a drop of 7.6 percent from the 2,727 homes contracted for sale in June of last year, according to preliminary numbers from OneKey MLS.
The number of pending home sales last month was the fewest for the month of June in the last 10 years.
For the first half of 2023 there were 12,914 homes contracted for sale in Nassau and Suffolk. Other than the first half of 2020, when the pandemic crippled home sales for two months, this year’s first six months have seen the fewest pending home sales since the first six months of 2014.
Though demand remains strong, brokers attribute the recent weakened sales numbers to a continued lack of supply exacerbated by higher mortgage rates.
There were 5,058 homes listed for sale with OneKey MLS as of Friday, 2,448 in Nassau and 2,610 in Suffolk. That’s down 26.2 percent from the 6,858 homes that were listed for sale at the end of June 2022.
At the same time, rising mortgage rates are keeping homeowners who have paid off their mortgages or have loans at much lower rates from making moves. This week the average rate for a 30-year fixed mortgage hit 7.03 percent, according to bankrate.com. That’s the highest interest rate since October and more than double the rate of just 18 months ago.
“The problem is many homeowners refinanced their mortgages over the last few years and no one wants to go from a 3- or 4-percent mortgage to a 6- to 7-percent mortgage,” said Ken Olson, an associate broker with HomeSmart Premier Living Realty, which has six Long Island offices. “The buyers are out there, and they’ve gotten used to the higher rates, but with the low inventory there are fewer transactions.”
Meanwhile, though home prices have pulled back slightly from their highs of last year, Long Island home prices remain robust, thanks mostly to the low supply and high demand market environment.
The median price of closed home sales in Nassau last month was $689,000, up 3.6 percent from the previous month’s median of $665,000, but down 3.6 percent from the $715,000 median price recorded in June 2022.
In Suffolk, the median price of last month’s closed home sales was $565,000, an increase of 2.7 percent from the $550,000 median price in May and 0.9 percent higher than the $560,000 median of a year ago. Last month’s median price in Suffolk is the highest since the $575,000 median in July 2022.
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