Mortgage rates are on a rapid ascent. But does anyone in NYC care?
The era of that cheap printable COVID money appears to be over with 30-year fixed rates climbing from all-time lows of 2.65% in January 2021 to over 5% just today. On a $1m purchase with 20% down the 2.65% rate would have equated to a mortgage payment of $3,224 – today it’s more like $4,295. But so far this hasn’t seemed to dampen the enthusiasm amongst New York City buyers for cooperatives and condominiums – nor pricing as those yet-to-be homeowners are hoping.
Rates’ fastest three-month increase since 1987 has made the housing market ground zero for the Federal Reserve’s efforts to tame inflation. Homebuyers, already facing surging house prices, are now contending with a substantial increase in financing expenses (WSJ).
For my younger readers, the chart above tells a story of an opportunity missed. But for any folks with a sense of history, this is still relatively low per the chart below. With inflation now running above 8.5%, one could argue that rates are still rather favorable.
So far my sentiment is that Manhattan is more insulated from mortgage rates than other parts of the country - 47% of purchases in Manhattan are all-cash compared to 30% of the US at large. And for the moment the demand at 4,505 pending sales is high relative to a modest supply of 5,929 homes – firmly putting us in a seller’s market. With rental rates at their highest level on record, I’m still seeing first-time home purchasers jump in the fray to purchase a home while pricing is still below historical highs from 2015.
On a personal side, it has been robust over at The Roebling Group. We’ve been growing our operations and are excited to welcome team member Amanda Bery as our newest associate.
Of course, with any real estate questions, I’d be happy to provide insight and here to help support your needs.
Best,
Corey
