If you’re looking at houses for sale in New York, the increase in mortgage rates may be weighing on your mind. Mortgage rates are rising at the highest rate in a decade as the Federal Reserve aims to reduce the amount of inflation and curb demand.
In the last month, the average 30-year fixed-rate rose by more than 5% – a first since 2011 aside from a temporary spike in 2018. This makes the cost of a mortgage about 40% higher in 2022, adding several hundred dollars to the monthly mortgage payment of an apartment, house, or condo for sale in New York City.
But with rising mortgage costs it’s not all bad news and the market for Brooklyn apartments for sale has certainly not waned. Find out more about how you can still purchase property in New York City even as mortgages spike.
Offsetting Rising Costs
A report compiled by Brick Underground highlighted the fact that there are a few ways that home buyers can offset the costs of rising mortgage prices. Of course, the most obvious is to scale down your expectations and look at houses for sale in New York in a lower price bracket, or to look at New York apartments to rent where you can bide your time until the tide turns and rates decrease again. But property is an investment, so these are not your only options.
Other ways to offset rising mortgage costs are to use strategies such as opting for adjustable-rate mortgages that allow for more financial flexibility, buying points, or improving your credit score.
Brooklyn Apartments For Sale Still Hot Property
According to a recent market report compiled by Miller Samuel, Brooklyn apartments for sale have remained one of the most stable markets over the last two years.
The Washington Post has highlighted how, over the past two years a combination of stimulus aid and low-interest rates and people’s ability to work remotely greatly boosted the demand for houses in specific areas – Brooklyn being one of them. This increased demand sent the price of houses skyrocketing and the average sale price of a single-family home in the borough rose by 15.2%.
There’s been a 16% increase in co-ops on the market and only a 4% decrease in condos in Brooklyn. Houses for sale in New York’s popular borough rose by an impressive 61% across the one-to-three-family home inventory.
Affordability is always a major factor when purchasing property, and for many New Yorkers, the parameters of this have changed. A mortgage that jumps from 3.5% to 5.5% changes a buyer’s options and narrows the choice of what type of property a buyer can afford. As buyers reassess their budgets, there’s likely to be an increase in demand for more affordable Brooklyn apartments for sale.
When asked why Brooklyn is booming in sales Miller Samuel confirmed that the market has been consistently strong, especially when compared to the rest of Manhattan, which only really woke up in the last year. Even in the wake of rising mortgage costs, buying a property is within many people’s means. In time, mortgage rates may decrease again too, as the economic impact of the last few years lessens.
Need advice about Brooklyn apartments for sale and how the mortgage rate could impact you?
Contact the friendly Platinum Properties team and we’ll help you find houses for sale in New York that suit your budget.