A home for sale in Smithtown, seen on July 29.

A home for sale in Smithtown, seen on July 29. Credit: Barry Sloan

A shortage of homes for sale, and concerns about rising interest rates, drove up Long Island home prices last month as buyers rushed to lock in sales.

In Suffolk County, homes sold for a median price of $390,000 in July, a 6.8 percent increase from a year earlier, the Multiple Listing Service of Long Island reported Wednesday. Nassau County homes traded for a median price of $540,000 last month, up 3.8 percent annually.

The number of closed sales fell year over year by 0.1 percent in Suffolk and 0.5 percent in Nassau, the listing service reported. The number of contract signings rose by 8.1 percent in Suffolk and 2.4 percent in Nassau, compared with the previous July.

Buyers are getting into bidding wars, especially for entry-level and midpriced homes, real estate brokers said.

Home shoppers need to act fast when a new listing comes on the market, said Irene Renna, a real estate agent with EXP Realty in Hauppauge.

“If you’re not going to run on day one when it comes out, don’t bother putting your key in the ignition,” she said. “You have a lot of competition.”

That’s what Ingrid Ulloa found this summer when she started searching for a two- or three-bedroom condominium for up to $300,000 in Suffolk County. She visited four units in a Coram complex with a pool and tennis court, but when she tried to go back for another look, she discovered that two had already gone into contract.

“It’s upsetting,” said Ulloa, 51, a second-grade teacher at a Brentwood school. “I was really surprised by how busy it is.”

A scarce supply of listings is one reason for the rivalry among buyers, brokers say.

The number of homes listed for sale fell by 3.2 percent annually in Suffolk and increased by 7.9 percent in Nassau. With less than 13,000 homes listed for sale Islandwide, inventory is less than half of what it was in 2007, before the housing market crashed.

At the current pace of sales, it would take less than five months to sell all the homes listed for sale in both counties. Real estate brokers say a balanced market has a six- to eight-month supply of homes.

A gradual increase in mortgage rates is prompting buyers to close sales before borrowing costs rise further. Last week, the average 30-year mortgage rate was 4.59 percent, up 0.69 percentage points from a year earlier, mortgage giant Freddie Mac reported.

“We have a lot of millennials that are jumping in the market now,” said Cynthia McKenna, an associate broker with EXP Realty in Hauppauge. “The interest rates moving up is kind of scaring them. They’re realizing they’re not going to stay at these low rates forever.”

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