Happy October! Spooky season is here, and New York City is buzzing with exciting activities, from apple cider tastings to costume contests. As we embrace the cool temperatures and changing leaves, our team has been diligently assisting clients with their real estate needs, despite the familiar challenges in the market. In September 2023, we saw 620 contracts signed, which is down 19% compared to last year and 28% compared to the previous month. Notably, this marks the lowest number of contracts signed in Manhattan since September 2019, excluding the market pause in 2020. While the decline in contract activity was influenced by higher mortgage rates compared to last year (more on this below), seasonality also played a role, with factors like Labor Day, Jewish holidays, and the start of the school year impacting sales.
Understanding Higher Mortgage Rates
Mortgage rates have recently been on the rise, and this has been widely covered in the media. You might have even noticed that rates reached their highest level in over two decades on October 12th (7.57%). If you're considering a move, this may raise concerns. So, let's break it down in simple terms. When mortgage rates go up, it makes buying a home more expensive. This is because as rates increase, your monthly mortgage payment also goes up. Urban Institute provides further insight, explaining that higher rates can reduce the number of affordable homes available to potential buyers. Additionally, rising rates can lead existing homeowners to hold onto their properties to keep their lower interest rates, reducing the number of homes on the market.
What's Next for Mortgage Rates?
If you're hoping for mortgage rates to drop, you're not alone. Many are waiting for that moment, but here's the reality: no one can predict when that will happen. Even experts find it challenging to forecast mortgage rate movements. While forecasts suggest rates may fall in the coming months, recent data shows a trend of rising rates. This uncertainty emphasizes the complexity of predicting mortgage rates. You might be familiar with the phrase; “Marry the home, date the rate” is a catchphrase that sprang up as interest rates started climbing last Spring. The proposal is simple: Buy a home at whatever mortgage rate is available with the intent to refinance and nab a lower rate later. Here's the best advice for your real estate plans: focus on what you can control. Instead of trying to time the market or guess future interest rates, build a team of skilled professionals, including a trusted lender and real estate agent. They can help you understand the market dynamics and how they impact your unique situation. And that's where the Germany Sears Team comes in!
Looking Ahead to Q4
Predicting market trends for the rest of Q4 is no easy task. Uncertainties persist, including interest rates, the House Speakership, and international developments. However, the NYC real estate market still offers opportunities. Success lies in collaborating with experienced professionals who can guide you through these trends and help you achieve your goals. As your trusted real estate expert, I'm here to provide guidance and support. Please feel free to reach out for a chat, questions, information, or even a coffee meeting. I'm eager to assist you in making the most of the current market.
Kindly--Gerald