Party's Over? The 7.22% Mortgage Rate
Updated: Oct 20, 2022
Mortgage rates rose considerably from 2.65% in January 2021 to today's rate of 7.22% - its highest in 20 years. This is freezing up the marketplace: Homeowners are incentivized to stay in place longer because of their lower existing rate which is keeping inventory modest. Purchasers are being forced to reduce their housing expectations or rent. Cash purchasers are eyeing steeper discounts for their ability to transact as prices start to fall. And sellers are just starting to revise their lofty pricing expectations that they had from six months ago when rates were far lower. What does all of this mean for you and the New York City market?
Manhattan sellers who must transact are feeling increasing pressure to negotiate more
Inventory is lower than 2019 levels - those considering selling aren't listing in this environment
Weekly contract activity is at its lowest over the past three years signaling slower demand
40% of transactions in Manhattan are all-cash and many buildings require 25-50% down which has created a floor for New York City where there's deeper liquidity than other markets
Buyers are finding ways to get creative with lower ARM rates, interest-only loans, and borrowing against their stock portfolios.
It takes precision to navigate today's housing market. If you have questions or you're on the move please feel free to connect with me anytime at 646.939.7375. Looking forward to it.