Long Island home prices kept rising last month, as falling interest rates gave the housing market a boost.
Suffolk County’s median home price jumped to $416,000 in July, up 6.7 percent from a year earlier, the Multiple Listing Service of Long Island reported Wednesday. In Nassau County, homes traded for a median price of $546,400 last month, a year-over-year increase of 1.7 percent.
The recent declines in mortgage rates has prompted many Long Islanders to get into the housing market, especially since rental prices are so high, brokers said.
Last week, the average interest rate for a 30-year mortgage was 3.6 percent, down almost a full percentage point from a year earlier, mortgage giant Freddie Mac reported.
“The low to median price range is the hottest commodity right now,” said George Castera, broker with Castera Realty Corp. in Freeport. Compared with the upfront costs of renting, he said, purchasers who enroll in government programs for first-time buyers or get other forms of assistance “can buy a house with the same amount of money and same qualifications that it would take them to rent an apartment.”
The federal tax overhaul that imposed a new $10,000 cap on deductions for state and local taxes also has caused shifts in the market, brokers said.
“There were a lot of people who held off until May to really make decisions about purchasing or selling,” said Amy Girimonti, broker with Prime Properties Long Island in Huntington. Among buyers of low- and mid-priced homes, she said, “a lot saw that the tax implication wasn’t quite as bad as they thought it was going to be, and therefore they felt comfortable with the decision to purchase a home.”
However, she said, “the higher-end market probably found that it was not as advantageous for them.”
Long Island remains a seller’s market, especially for homes listed at or below the median price, brokers say.
At the current pace of sales, it would take 4.4 months to sell all the listed homes in Suffolk and 4.9 months in Nassau, listing service figures show. A balanced market has a six- to eight-month supply, brokers say.
The number of closed home sales last month rose annually by 1.8 percent in Suffolk and fell by 3.4 percent in Nassau, the listing service reported. Inventory fell by about 1 percent in Suffolk and rose by 8.3 percent in Nassau, compared with the previous July.
In a sign of rising demand, the number of contract signings jumped year-over-year by 11 percent in Suffolk and 14 percent in Nassau last month.
Home prices have been making annual gains or holding steady every month for more than two years in Suffolk and more than four years in Nassau, listing service figures show. Over the past three years, prices have risen faster in the more affordably priced eastern communities of Long Island, with a 21 percent increase in Suffolk and 14 percent in Nassau.