Long Island home buyers hurried to lock in low interest rates last month, giving the housing market a burst of activity.
Suffolk County saw a 22 percent year-over-year increase in transactions, with 1,071 homes changing hands in September, the Multiple Listing Service of Long Island reported Thursday. In Nassau County, 995 homes were sold last month, a 14.4 percent bump compared to a year earlier.
However, sales didn't match the feverish pitch reached in August. The Island's total of 2,066 homes that changed hands in September was down 20 percent from August's.
Suffolk's median home price was $320,000 last month, a year-over-year gain of 4.1 percent; Nassau's median was $430,000, a gain of 3.4 percent.
Low mortgage interest rates and reasonable home prices continue to draw buyers into the market, said Rich Halloran, an associate broker with Coldwell Banker Residential in Babylon.
The partial government shutdown and impasse over the federal debt ceiling "may affect people's morale," but so far it has not slowed sales, Halloran said. "Even with all this stuff going on in the government, I think the housing market is going to continue to get stronger," he said.
However, if interest rates jump, that could drive prices down, Halloran said. A rate increase of 1 percentage point causes buying power to decline by about 10 percent, he said.
The average 30-year, fixed-rate mortgage carried an interest rate of 4.23 percent this week. In early May the rate was 3.35 percent, according to Freddie Mac. Rates hit a historic low of 3.31 percent in November 2012.
On a $300,000 mortgage, a rate increase of 0.25 percent translates to a $43 rise in monthly payments, according to Bankrate.com.
"It's not life-changing," said Jason Marcus, a senior mortgage planner with Continental Home Loans, "but it is agitating when you're looking at the rates and it's such a roller-coaster ride."
Danny Caruso, a 31-year-old physician assistant, said low rates motivated him to start house hunting late last year. In July he closed on a house in Franklin Square with a mortgage at 3.75 percent. "I was just really lucky to get in at the right time," he said.
His friends Scott and Megan Shukri closed on a house in Greenlawn last month. They missed out on Caruso's rock-bottom rate, but they are still pleased with their 4.625 percent rate.
"I do wish it was a little better, but I can't really complain," said Scott Shukri, 30, also a physician assistant. "My parents, when they got their first home in the 1980s, paid 18 percent."