Long Island housing prices climbed last month, with Suffolk County home values climbing more than 10 percent from a year earlier, their biggest jump in more than a decade, and Nassau prices rising about 8 percent.
Driving the price rise were a tight supply of homes for sale, strong demand from first-time buyers and a rush to lock in interest rates before they rise further, agents said.
Homes in Suffolk sold for a median price of $370,000 in May, up 10.4 percent from a year earlier, the Multiple Listing Service of Long Island reported Thursday. The last time prices rose that fast was in December 2005, when Suffolk home prices increased by 10.5 percent annually, to $400,000.
In Nassau County last month, homes sold for a median price of $519,000, up 8.1 percent from the previous May. Over the last 12 months, Nassau home prices have posted year-over-year gains ranging from 3.7 percent to 12.5 percent.
The number of closed homes sales fell annually by 5.5 percent in Nassau and 3.9 percent in Suffolk last month.
Suffolk’s more affordable home prices and lower taxes are attracting first-time buyers, real estate brokers said.
“Nassau has just become more and more unaffordable for a lot of people, it’s a combination of prices and taxes,” said Gary Baumann, an associate broker with Douglas Elliman in Plainview and Huntington. “While the economy is doing well and everyone has got a job, you haven’t seen a real big increase in wages.”
Plus, he said, “with interest rates creeping up a bit, that’s taking away some of their buying power.”
The average mortgage rate was 4.62 percent this week, up 0.71 percentage points from a year ago, mortgage giant Freddie Mac reported.
Mortgage rates were on the mind of Melanie Fiume, 23, an administrator at a hospital in Glen Cove, as she searched for a home.
Rates “started rising steadily, and I wanted to grab onto something before they got too high,” she said.
In November, Fiume started looking for a house or condominium in Long Beach, Westbury and Huntington. She put in a bid on one home for less than the asking price, but another buyer swooped in with a full-price offer before she could sign the contract, she recalled.
“I had to go out in Suffolk to find something; I couldn’t stay in Nassau, even for a condo,” she said.
Now she is thrilled with the two-bedroom condo she purchased in the Village of Babylon for $359,000. She’ll rent out the second bedroom to a friend.
“It’s just such a cute community,” she said of Babylon. “I wanted to be close to a town that had something going on, but in a decent price range that I could afford.”
Demand from first-time buyers for low- and midpriced homes is creating a shortage of listings in Suffolk, brokers said. Suffolk County buyers competed for 6,848 listings last month, down 10 percent from the previous May, listing service figures show.
In Nassau, the number of homes for sale rose by 5 percent year over year last month, to 5,466, in the first annual increase since 2015.
“The higher end is just taking a little longer to sell, so that’s why you’re seeing a shift in the inventory level,” Baumann said.