New York Housing Market

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New York Housing Market Trends & Forecast

July 3, 2024

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Every state is unique when it comes to the real estate market. That’s why it’s critical to understand the market you live or operate in. Whether you’re renting, buying, or selling, it will impact many aspects of your life.

New York Housing Market Overview 

Perhaps best known for New York City and American iconography like the Statue of Liberty and the Empire State Building, New York is located in the northeastern United States and is among the most populous states in the country. As the state is also home to Wall Street, it is no surprise that Finance and Insurance were the top contributors to the state’s 2023 GDP, according to data from IBISWorld. Real Estate, Rental, and Leasing was the third highest contributor last year, however, making the state’s housing market is worth an investigation. 

At the beginning of the year, experts predicted that the average prices of homes in New York would rise, continuing the appreciation that was seen all over the country in the previous year. However, the same article predicted that soaring interest rates from the end of last year would begin to settle and stabilize. As we will explore later in this article, both predictions have proven true as of April 2024, with many sources indicating that the housing market in New York will continue to trend in that direction.

Historically high interest rates have seen a significant decrease across the country. The national average 30-year fixed mortgage rate in late 2023 approached 8% but settled in April 2024 to just below 7%. As we will discuss later in this article, a similar trend can be seen in the New York housing market, reflecting easing inflation that is bound to benefit a growing demographic of prospective homeowners across the country.

New York Market Trends

To understand the New York real estate market, it’s important to keep up with trends. Let’s look at some key ones in New York:

Note: These statistics are based on Redfin’s monthly housing data from April 2024

Median Home Price

The median price of a home in New York as of April 2024 was $557,500, according to Redfin’s monthly housing market data. This is an increase of 6.5% from April 2023, accurately reflecting predicting of continuing appreciation of housing prices in the state. The New York City housing market is very different, however, with a median home price of $810,000 in April 2024 that represented a 0.61% decrease from the previous year. It is important to remember that statewide trends are aggregates from diverse housing markets in very different parts of the state.

Number of Homes Sold in April 2024 

10,010 homes were sold in New York state in April 2024, which is a 7% decrease from the previous year. This number can be expected to increase throughout the summer when home sales are much more common. This number also falls short of the peaks that the state saw in the summers of 2021 and 2022.

Nationally speaking, sales usually peak during the spring and summer months and slow in the winter. In fact, the National Association of Realtors (NAR) predicts that in February and March alone, sales activity increases by as much as 34% and prices by 3%.

Median Days on Market (DOM)

Days on market (DOM) is a measure of the average length of time a home remains listed on the market before being put under contract. A lower DOM signals a highly competitive seller’s market with more pressure on buyers to make higher offers and remove contingencies. A higher DOM signals a buyer’s market as sales are slower and sellers have less leverage.

The median DOM in New York in April 2024 was 35 days, which is a decrease from 42 the previous year. This means that on average, listings spend over a month on the market before they are purchased. Though this may seem like a relatively high number, the decrease from the previous year suggests a market that is becoming increasingly more competitive.

New Supply Statistics

In April 2024, there were about 2.02 new residential construction permits per 1,000 people in New York. This statistic, which points to the rate of new construction projects, is below the national average. Increased housing supply is predicted to ease housing prices ad increase affordability in many markets across the U.S. in 2024. 

Property Tax Rate

According to Rocket Mortgage, the average property tax rate in New York is 1.4%. This places the state right outside of the top 10 highest average rates in the country. Its average annual property tax is around $3,407.29. However, it is important to keep in mind that this statistic reflects the average of a lot of data in a populous state with significant geographic and economic diversity. Tax rates are likely to vary depending on the value of a home and its location in the state.

Foreclosure Rate in Q1 of 2024

In the first quarter of 2024, 1 in every 1,395 homes in New York experienced a foreclosure filing, according to recent data from ATTOM. This is above the national average, and New York is ranked 12th for foreclosure rates nationwide.

Hottest Local Markets in New York

  1. New York City

New York City is the most populous city in the United States and is home to some of the most iconic cultural landmarks in the country. As previously mentioned, its housing prices are well above the statewide median at $810,000. Its median DOM of 64 days is significantly higher than the national average and suggests an imbalance between supply and demand. However, this number decreased by 17 in the past year, a margin that suggests an increasingly competitive market. Some of the most popular neighborhoods in New York City are Upper East Side, Upper West Side, and Midtown East

  1. Albany

Albany is the capital city of New York. Its median housing market prices are much lower than New York City’s, and lower than the statewide average at just $270,000. However, this represents a 12.5% increase over the past year. Its median DOM is also much lower than the statewide median at 9 days, which has increased from 10 from April 2023. This suggests a very competitive seller’s market where listings are purchased quickly. Some of the most popular neighborhoods in Albany are Pine Hills, Campus Area, and Delaware Avenue.

  1. Buffalo

Buffalo is one of the most populous cities in New York, located in the northwest of the state near the state’s Canadian border. Its median home price in April 2024 was $209,250, a 13.1% increase from the previous year. Its median DOM of 17 days is considerably lower than the statewide average, suggesting a more competitive seller’s market. Some of the most popular neighborhoods in Buffalo are North Park, Lovejoy, and South Park.

Economic Factors Impacting the New York Housing Market

A holistic view of New York’s housing market requires a basic understanding of the main economic drivers affecting the market. Let’s take a look at a few of the critical ones:

Mortgage Rates

Mortgage rates are a common cause of concern for would-be homeowners across the U.S. in 2024. As previously mentioned, national averages have dipped from last fall’s record highs, and New York is no different. According to Zillow, the housing market in New York is seeing 30-year fixed mortgage rates that average around 6.11%. This is considerably down from rates in late 2023 that were approaching 7.7%. It also accurately reflects the predictions for the year that interest rates would decrease and settle above 6%.

Inflation and Cost of Living

Mortgage rates are tied to inflation, another massive contributing factor to the affordability of housing and the state of housing markets in general. Inflation has increased the cost of living for many across the U.S., including in New York. This means fewer people can truly afford to limit housing costs to less than 30% of their monthly income. 

Population Changes and Demographics

A changing population can also have implications for the housing market. According to the U.S. Bureau of Labor Statistics, the unemployment rate in New York is one of the highest in the country at 4.2%. It currently has the 12th highest unemployment rate in the country. It is important to note that this is aggregate data from many diverse economies in a very populous state. However, unemployment has a noticeable effect on the housing market of an area and will continue to affect demand for homes in the future.

New York Housing Market Forecast 2024 

As previously mentioned in this article, experts considered the appreciating housing prices in New York in 2023 and predicted that prices would continue to rise throughout the year. This has proven true over the course of the year so far, though steadying interest rates and an anticipated increase in supply could indicate a slowing growth in prices. 

Likelihood of New York Housing Market Crash

Though the continuing growth of housing prices in New York may seem concerning, experts maintain that a crash is highly unlikely for the state’s housing market. There are multiple reasons for this, including the stabilized mortgage rates and projections that point to an increase in both supply and demand in the market. Prices seem poised to continue rising throughout the year, but they are unlikely to cross any significant or concerning thresholds.

Forecast for the U.S. Housing Market

Now that we’ve looked at New York’s housing market, let’s zoom out a little bit. What about the U.S. housing market? What do you need to keep an eye on in the coming years?  

The United States’ current median existing-home sale price is around $384,500 per the National Association of Realtors. The inventory, though, remains low. A balanced market typically has a 5-to-6-month supply, but the current figure is 2.9.

We’re currently in a seller’s market with buyers looking at continued rising house prices. The same trend can be seen with renters. Housing continues to appreciate, in general.

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research, National Association of Realtors, believes the housing market will appreciate 15 to 25% over the next five years. He thinks that the seller’s market will continue because housing inventory will remain low. In five years, however, he predicts a more balanced market, in which neither party has a built-in advantage. Thus, the market will shift to a case-by-case basis to determine what kinds of deals people can get.

Hybrid work also impacts the housing market. This shift in work culture means suburbia will continue to grow. States like Texas, the Carolinas, Tennessee, and Florida should see continual growth.

The number of single-family homes built decreased over the past couple years while the number of multi-family homes increased due to lower prices and a demand for affordable housing. Higher mortgage rates and inflation (affecting price of materials) were the main causes.

Lower income households continue to struggle in the current housing market. This trend appears likely to continue into the foreseeable future. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.

New York Rental Market

The rental and buying market are obviously closely linked. When home prices fall, landlords are more likely to buy properties to rent out. Home prices and rental prices are correlated as well because a hot market means prices rise.

Rents were more unaffordable than ever in 2021 and 2022. In 2022, 22.4 million households paying rent said it was unaffordable, which is the highest that figure has ever been, according to a January report from the Joint Center for Housing Studies at Harvard University. The study found that half of all renters in the United States spent over 30% of their income on rent and utilities.

The markets cooled in 2023, though, due to new units and decelerating demand. But a serious problem persists: Rent increases are still outpacing income gains.

Moreover, high interest rates are keeping borrowing and transaction activity down. Over half the banks surveyed by the Federal Reserve reported that demand for multifamily loans decreased year-over-year.

The pandemic caused a housing disparity that isn’t going away anytime soon. Unaffordable housing is a serious issue across America. Whether high rents or low income is the main cause doesn’t change the fact that this problem is widespread.

This short summary leads directly into New York’s current rental market. Below are just a few of the current trends for New York’s rental market based on data pulled from Zillow:

New York Rental Market Key Trends

  • Median rent: $3,600 
  • Month-over-month rent change: +$50 
  • Year-over-year rent change: -$15 
  • Available rentals: 16,832

Conclusion

New York is a very highly populated state, and different areas are bound to experience diverse economies and housing markets. However, 2024 saw continued appreciation and some indicators of a stabilizing and healthy housing market that buyers and sellers should watch closely. Experts and analysts will continue to monitor this market, as well as nationwide factors like interest rates and new construction.

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