Home sales declined in February with the combined effects of severe winter weather and the decline in affordability due to higher mortgage rates and prices than those seen in the previous year. Sales have also been hindered at the beginning of this year by new mortgage and flood insurance regulations that recently took effect. The flood insurance regulations are currently set to be reviewed, and buyers and sellers in flood-prone areas may want to become informed on how these regulations and potential changes are affecting their market. Home prices however, rose slightly from January to February even as inventory levels loosened slightly and home sales slowed. In addition, prices are still well above those seen at this time last year. Buyers willing to brave the cold may be able to take advantage of some of the short-term price breaks seen early this year. With prices still showing an upward year-over-year trend and inventory levels still tight, sellers remain well positioned in the Queens real estate market.
Month’s Supply: 7 Months
Mortgage rates have remained relatively flat from last month. The upward pressure on rates generated by the Federal Reserve’s winding down of quantitative easing has been counterbalanced by downward pressure on Treasury yields being generated by turmoil in emerging markets. Currently, Freddie Mac reports the following figures: 30-year fixed rate, 4.33%; 15-year fixed rate, 3.35%; 5/1-year adjustable rate, 3.08%.
Queens NY Home Sales
The annual pace of home sales was 547 homes in February. This was down 19.1% from January and down 3% from the same month of the previous year. Severe winter weather likely affected home sales in many parts of the county in February; however, higher mortgage rates and prices, combined with new regulations, have also had a significant dampening effect on home sales. February also saw more severe weather than usual and this will likely be reflected in next month’s numbers. As we move out of the winter months, and lenders and consumers adjust to the changes in affordability and regulation, we should see sales begin to pick back up.
Queens NY Home Prices
The median home price rose 1.3% from January to February regardless of a slight increase in inventory and a fall in the pace of sales. Median prices are not seasonally adjusted so some decline at this time of year is considered normal. Prices remain almost 16% above those seen at this time last year, and many sellers continue to benefit from equity gains accrued in last year’s substantial price recovery.
Queens NY Housing Inventory
Inventory levels recovered slightly in February after taking a bit of a dip in December. The total number of homes that were available for sale remained the same from January to February, a total of 5,338 homes for sale. This represents 7 months of inventory at the current sales pace, which is up 6.1% from the previous month. As we move further into the year, we should continue to see inventory loosen across the borough, giving buyers more choices.