Low interest rates ease Manhattan home buyers

With interest rates at record lows, home hunters who are hesitant about buying in the Big Apple should reconsider, a chief economist said.

The federal interest rate is currently at 3%, and isn't expected to go up anytime soon, according to Greg Heym, chief economist for Terra Holdings, a real estate service company. Although Manhattan has limited inventory, Heym said the interest rates could make it easier to secure that dream apartment.

"It's a good opportunity to go out and see what is available," he said.

Andrew Barrocas, CEO of the real estate group MNS, agreed, but added that there wouldn't be a dramatic surge in home buying during the fall and winter, not only because there are other barriers that buyers have to face, including stronger emphasis on credit.

"You'll see more buyers but you won't see more sales," he said. "The part that still holds people back is the high down-payment," he said.

Heym added that the low rates would have a negating effect on the low inventory, and keep the Manhattan market strong while new developments are being constructed.

"We will see this continued strength because of the decrease in inventory and increase in demand," he said.