Long Island home prices climb as inventory falls to lowest in a decade

The number of homes for sale on Long Island fell to the lowest level in more than a decade at the end of February, pushing prices higher just ahead of the busy spring real estate season, according to new data released Tuesday.

The median single-family home sale price rose 6.3% to $850,000 in Nassau County in February compared with the same month a year ago, according to a new report from OneKey MLS, the multiple listing service that covers Long Island.

Meanwhile, in Suffolk County, the median price grew at a much slower pace, 0.7%, to $685,000 last month compared with the same figure in February 2025. 

Dual challenge

Heading into the spring, local homebuyers are facing a dual challenge of a severe shortage of homes on the market and mortgage rates that have started to creep up since the start of the Iran war.

At the end of February there were 3,511 single-family homes on the market in Nassau and Suffolk counties, which was down 20.7% from a year ago. The combined number of houses, condos and co-ops for sale was the lowest recorded by OneKey MLS at the end of any month since at least 2013, according to the report.

More homes will hit the market in the spring, said Frank DellAccio, a real estate broker who leads Century 21 AA Realty in Lindenhurst and Massapequa, but he is not sure there will be enough to satisfy all interested buyers.

"I don’t see the buyer pool dwindling at all," DellAccio said. "There’ll be stronger demand than there is supply. We’re hoping to see a little bit more supply than in the past few springs."

Despite a steep rise in prices, many homeowners have been reluctant to cash in if they’re buying elsewhere on Long Island, he said, because they fear they won’t be able to find their next home at a reasonable price.

"It’s like the chicken and the egg conversation," DellAccio said. "We can’t get homeowners to put their houses on the market because there aren’t any homes for them to buy, so the inventory doesn’t grow."

Closings down

The shortage of inventory drove down the number of transactions that closed in February. There were 1,148 closings across Long Island last month, which was 3.6% fewer than during the same month a year ago.

Another recent market report showed Long Island had the steepest year-over-year drop in new listings among the 50 most populous areas in the United States. Long Island saw a 25.8% decline in new listings in the four weeks ending March 8 compared with the same stretch a year ago, according to a Redfin report. 

Mortgage rates could also serve as an impediment to buyers. Homebuyers had benefited from falling mortgage rates in February, with the average rate dipping below 6% for the first time since 2022 late last month. But the war in Iran, and the potential for rising inflation, has led rates to climb in recent weeks. The average 30-year fixed rate on Monday was 6.36%, according to Mortgage News Daily.

Bigger mortgage payments

The increase in the average mortgage rate over the past three weeks translates to about $100 more per month for a borrower purchasing a $600,000 home with a 20% down payment, said Daryl Fairweather, chief economist at Redfin. Plus, the war’s effect on oil prices could drive up consumers’ household costs.

"Buyers are going to be increasingly budget-constrained when it comes to buying a home because of the direct cost of the mortgage and because their budgets are being eaten away in other categories," Fairweather said.

Mortgage rates have also blocked some families from upgrading to larger homes. Homeowners with mortgage rates around 3% would see their monthly housing payments more than double if they sold their homes and upgraded at today’s prices and interest rates, said Christopher White, a real estate agent at Compass, who sells homes in Nassau and Suffolk.

"That’s the reason why there’s not as much inventory on the market, creating a seller’s market," White said.

For those homebuyers preparing to search this spring, White advises getting prepared to act fast by securing a lender preapproval and hiring a team of professionals, including an agent, an attorney and an inspector, before making an offer.

"We’re going to see really good homes come on the market in the next couple of months, and the buyers that are ready are the buyers that are going to win," he said.