Manhattan was among the many markets impacted by a slowdown in the US housing market over the summer, according to a recent analysis.
Overall, the number of Manhattan homes in contract plunged a whopping 39% year-over-year, according to data from June through August compiled by brokerage firm Serhant. The trend coincided with a spike in mortgage rates over the last several months, with the current average 30-year fixed-rate mortgage hovering near 6%.
While the housing slowdown has occurred across the board, it is “heavily concentrated in the sub-$1 million market,” Garrett Derderian, Serhant’s director of market intelligence, wrote in a blog post.
“This is undoubtedly due in large part to rising mortgage rates, which have the most outsized impact on lower price points,” Derderian wrote.
The number of sale contracts signed for Manhattan homes priced under $500,000 fell 37% from June through August compared to the same period one year earlier. The sales figure is also down 29% from its average level in the 10 years prior to the COVID-19 pandemic.
For homes priced between $500,000 to $1 million, the number of signed contracts was down 41% year-over-year in the summer months and 15% compared to the 10-year average ending in 2019, according to the firm’s calculations.
Sales were down at least 24% in all Manhattan neighborhoods, but the most significant slowdown occurred on the Upper East Side, were homes-in-contract fell 43%. Overall contract activity was 10% lower than it was in the pre-COVID-19 pandemic decade.
Mortgage rates are 3% higher than they were one year ago, according to Freddie Mac. The surging rates, which followed the Federal Reserve’s series of sharp interest rate hikes to tame inflation, have further hampered affordability for prospective homebuyers.
Manhattan home prices have yet to see much of an impact from the slowdown in sales. The median price of a Manhattan home in contract jumped 1% to $1,159,000 year-over-year.
“This is promising news for homeowners as we have yet to see any major correction in prices due to fewer sales, rising mortgage rates, and economic instability,” Derderian said.
Bloomberg first reported on Serhant’s analysis.
As The Post reported last week, real estate firm Redfin recently warned that it expected the US housing market to remain “especially frigid” through the winter as homebuyers grapple with the higher mortgage rates.