LI home prices rise as mortgage rates fall to record lows
A home in Jericho for sale earlier this month; the median price in Nassau rose 5% in February year over year, in Suffolk it rose 8%. Credit: Danielle Silverman
Long Island home prices climbed last month as interest rates fell to record lows.
Suffolk County homes sold for a median price of $405,000 in February, up 8% from a year earlier, the Multiple Listing Service of Long Island reported Friday. In Nassau County, the median price increased by 5% annually, to $530,000.
The number of sales rose year over year by 7.3% in Nassau and 3.7% in Suffolk.
The number of new contract signings jumped by nearly 20% in Nassau and 6.3% in Suffolk, compared with the previous February, the listing service reported.
But the numbers generally reflect the market before concern increased about the effect the coronavirus might have on the economy. Experts said it's too early to tell the long-term effects that might have on the real estate market.
Low mortgage rates continue to make it easier to afford homeownership, said Nicholas Speirs, a real estate agent with Alexander Madison Realty in Merrick.
The average rate for a 30-year mortgage fell to 3.29 percent for the week ending March 5, down 1.12 percentage points from a year earlier and the lowest ever recorded by mortgage giant Freddie Mac, which has been tracking rates since 1971.
Low rates are “the driving factor” behind the boom in home sales, Speirs said. “You could easy get 3.75, 3.5 as the interest rare if you have decent credit.”
“The serious buyers are out there if the house is priced accordingly,” he said. “As long as the rates remain low, the buyers are there because it’s cheap to borrow money right now.”
The number of homes on the market declined annually by 2.4% in Nassau and 5.3% in Suffolk, the listing service reported. In both counties, it would take five to six months to sell all the listed homes at the current pace of sales. A balanced market has a six- to eight-month supply, brokers say.
Maura McDermott covers education. Since joining Newsday in 2012, she also has worked on the investigations team and covered real estate and the business of health care.
