Stock market mayhem no match for Long Island housing market, experts say
Stocks may be plummeting and soaring — sometimes all in one day — but that volatility is unlikely to creep into Long Island’s housing market and drive down home prices, local real estate experts said.
That’s because the lack of available houses for sale means that even if some buyers paused their search, there would still be ample demand for Long Island single-family homes, said Jonathan Miller, CEO of appraisal firm Miller Samuel in Manhattan, who tracks real estate markets including Long Island.
"Inventory isn’t surging and even if it rises, it’s still woefully inadequate to meet demand — even diminished demand — and that’s why we’re seeing such price growth," Miller said.
Median home prices on Long Island have risen significantly since the pandemic and continued that trend this winter. The median single-family home price in Suffolk County rose 9.2%, matching a record high, at $680,000 in February, according to the latest data available from OneKey MLS.
The Nassau median price increased 5.7% to $795,000 compared with the same month a year earlier. In Nassau, there were 12% fewer listings available to buyers at the end of February as there were at the same time a year ago.
While it’s still too early to determine the long-term effects of President Donald Trump’s tariff policies on the U.S. economy, real estate and mortgage industry experts said they didn't expect a drastic increase in home sellers.
Miller noted that homeowners have seen significant equity gains in their homes over the past several years, and elevated mortgage rates are not enticing homeowners to sell.
"I think we’re still going to see prices rise in 2025 when the dust settles," he said of the Long Island market.
Buyers are unlikely to get relief because the average homeowner would have to accept a higher mortgage rate to move, said Molly Boesel, senior principal economist at Cotality, a provider of property data and analytics formerly known as CoreLogic.
The weighted average outstanding mortgage rate was 4.1% at the start of the year, according to Cotality. Meanwhile the average 30-year fixed mortgage rate last was 6.62% for the week ending Thursday, according to Freddie Mac.
"Those who don’t need to sell will keep their houses off the market," Boesel said.
But that doesn’t mean financial market changes can’t rattle homebuyers.
About 20% of U.S. prospective homebuyers said they planned to sell stock investments to fund a down payment, according to a poll of 653 likely buyers conducted in September and released by real estate brokerage Redfin.
"Big drops in the stock market not only cut into funds earmarked for down payments and other housing costs, they shake consumer confidence and make people feel poorer in general," Chen Zhao, who leads economic research at Redfin, said in a statement.
As they prepare to buy homes, borrowers should make sure funds for down payments and closing costs are easily accessible in high-yield savings accounts or other more stable investments, said Larry Matarasso, a senior loan officer at mortgage brokerage Green River Capital in Plainview.
"If you’re using the stock market to plan for your down payment and closing costs, it puts you in a much riskier position," Matarasso said.
And it’s not just about stocks. Lenders use the yield on 10-year Treasury notes in setting mortgage rates. Yields rise as bond prices fall, and a sell-off in Treasurys earlier this week pushed mortgage rates higher.
From Friday to early Wednesday, the rates for 30-year fixed mortgages from some lenders rose by about one-half of a percentage point, Matarasso said.
On a $500,000 loan, a half-point change from 6.25% to 6.75% could translate to roughly a $165 a month difference, Matarasso said.
After Trump announced a 90-day pause on some tariffs Wednesday afternoon, the yield on 10-year Treasurys initially fell, but it was once again rising as of Thursday afternoon.
Mortgage brokers have been accustomed to the unpredictability, particularly in 2022 when the average mortgage rate doubled in less than a year, but it poses a challenge as buyers approach closing.
"We like calmness because calmness allows homebuyers to plan," Matarasso said. "We don’t like volatility."
Zahra Jafri, president of Lynx Mortgage Bank in Westbury, advised aspiring homebuyers to focus on what they can control — budgeting expenses and saving for a down payment.
"Even with what we’re seeing in the markets, the demand and desire for homeownership is there, and it’s really just about getting proper guidance and proper preparation to be in a position to make a purchase," she said.
Stocks may be plummeting and soaring — sometimes all in one day — but that volatility is unlikely to creep into Long Island’s housing market and drive down home prices, local real estate experts said.
That’s because the lack of available houses for sale means that even if some buyers paused their search, there would still be ample demand for Long Island single-family homes, said Jonathan Miller, CEO of appraisal firm Miller Samuel in Manhattan, who tracks real estate markets including Long Island.
"Inventory isn’t surging and even if it rises, it’s still woefully inadequate to meet demand — even diminished demand — and that’s why we’re seeing such price growth," Miller said.
Median home prices on Long Island have risen significantly since the pandemic and continued that trend this winter. The median single-family home price in Suffolk County rose 9.2%, matching a record high, at $680,000 in February, according to the latest data available from OneKey MLS.
WHAT TO KNOW
- The turbulence in the stock market is not expected to spill over to Long Island's housing market, experts said.
- An inadequate supply of homes for sale means that even if some buyers paused their search, local home prices could still rise.
- Elevated mortgage rates have discouraged sellers from listing their homes.
The Nassau median price increased 5.7% to $795,000 compared with the same month a year earlier. In Nassau, there were 12% fewer listings available to buyers at the end of February as there were at the same time a year ago.
While it’s still too early to determine the long-term effects of President Donald Trump’s tariff policies on the U.S. economy, real estate and mortgage industry experts said they didn't expect a drastic increase in home sellers.
Miller noted that homeowners have seen significant equity gains in their homes over the past several years, and elevated mortgage rates are not enticing homeowners to sell.
"I think we’re still going to see prices rise in 2025 when the dust settles," he said of the Long Island market.
Buyers are unlikely to get relief because the average homeowner would have to accept a higher mortgage rate to move, said Molly Boesel, senior principal economist at Cotality, a provider of property data and analytics formerly known as CoreLogic.
The weighted average outstanding mortgage rate was 4.1% at the start of the year, according to Cotality. Meanwhile the average 30-year fixed mortgage rate last was 6.62% for the week ending Thursday, according to Freddie Mac.
"Those who don’t need to sell will keep their houses off the market," Boesel said.
But that doesn’t mean financial market changes can’t rattle homebuyers.
About 20% of U.S. prospective homebuyers said they planned to sell stock investments to fund a down payment, according to a poll of 653 likely buyers conducted in September and released by real estate brokerage Redfin.
"Big drops in the stock market not only cut into funds earmarked for down payments and other housing costs, they shake consumer confidence and make people feel poorer in general," Chen Zhao, who leads economic research at Redfin, said in a statement.
As they prepare to buy homes, borrowers should make sure funds for down payments and closing costs are easily accessible in high-yield savings accounts or other more stable investments, said Larry Matarasso, a senior loan officer at mortgage brokerage Green River Capital in Plainview.
"If you’re using the stock market to plan for your down payment and closing costs, it puts you in a much riskier position," Matarasso said.
And it’s not just about stocks. Lenders use the yield on 10-year Treasury notes in setting mortgage rates. Yields rise as bond prices fall, and a sell-off in Treasurys earlier this week pushed mortgage rates higher.
From Friday to early Wednesday, the rates for 30-year fixed mortgages from some lenders rose by about one-half of a percentage point, Matarasso said.
On a $500,000 loan, a half-point change from 6.25% to 6.75% could translate to roughly a $165 a month difference, Matarasso said.
After Trump announced a 90-day pause on some tariffs Wednesday afternoon, the yield on 10-year Treasurys initially fell, but it was once again rising as of Thursday afternoon.
Mortgage brokers have been accustomed to the unpredictability, particularly in 2022 when the average mortgage rate doubled in less than a year, but it poses a challenge as buyers approach closing.
"We like calmness because calmness allows homebuyers to plan," Matarasso said. "We don’t like volatility."
Zahra Jafri, president of Lynx Mortgage Bank in Westbury, advised aspiring homebuyers to focus on what they can control — budgeting expenses and saving for a down payment.
"Even with what we’re seeing in the markets, the demand and desire for homeownership is there, and it’s really just about getting proper guidance and proper preparation to be in a position to make a purchase," she said.
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.
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