Long Island home prices climbed to new records for a second straight month in July, as houses sold faster and the housing market continued to test the limits of what buyers can afford.
The median sale price for a single-family home in Nassau County last month rose 6.8% to $860,000, surpassing the previous record set in June by $10,000, according to new data from OneKey MLS. A year ago, the median was $805,000.
In Suffolk County, the median increased 6.5% last month to $702,000 compared with $659,000 a year ago.
The number of homes on the market has not kept up with significant buyer demand, said Richard Haggerty, CEO of OneKey MLS, the multiple listing service which covers Long Island.
"Obviously, we have not hit the ceiling with prices yet," he said.
There were 5,329 single-family home listings on Long Island at the end of July, according to OneKey, which was down 5.1% from the same month a year ago.
"It would be very interesting to get in the heads of sellers right now because it is such a strong market where sellers are getting their prices," Haggerty said. "So what's the hurdle for more people not testing the waters?"
Some homeowners may believe the market is too expensive and competitive to move to a different home on Long Island, he said.
The lack of for-sale listings has led to fewer sales. There were 1,853 closings on Long Island last month, which was down 4.6% compared with July 2024.
Those homes that were available have been selling at a faster clip, with the average time on market in Nassau and Suffolk both falling below 40 days in July.
It's common for attractive listings in the $600,000-$700,000 range to find a buyer within the first seven to 10 days they're on the market, said Stephen Zappalla, a real estate agent at Keller Williams Realty Elite in Massapequa.
While the housing market in some parts of the country, including certain areas of Florida and Texas, has shifted to favor buyers, sellers are still in a strong position on Long Island, Zappalla said.
"Long Island is just a beast of its own, and it's very insulated," Zappalla said. "We have limited inventory, we have a tremendous amount of wealth here, and we have a substantial amount of buyers that are coming and relocating out of the boroughs to Long Island."
With monthly mortgage payments often costing buyers upward of $5,000 in Nassau County, Zappalla said he advises buyers to carefully consider whether they can afford to purchase. They also shouldn't count on the price appreciation of more than 40% over the past five years to repeat itself, if they need to sell in the next few years, he said.
"Buyers are overextending themselves given how high prices are," he said.
However, the creditworthiness of homebuyers has improved in recent years, according to the Federal Reserve Bank of New York, with the median credit score for new mortgage borrowers at 777 out of a possible 850 during the second quarter.
Lina Lopes, an associate broker at Douglas Elliman in Farmingville, said she's similarly concerned about buyers who stretch their budgets to afford a house. She's hopeful buyers who keep searching through the late summer, when some house hunters typically take a break from their search, may have more options.
"I've had more homeowners put their houses on the market this August than any other August that I've worked in," she said.
Elevated mortgage rates have kept many homeowners who recently bought or refinanced locked in place.
Mortgage rates fell slightly last week to 6.63% for the average 30-year fixed loan, according to Freddie Mac. But the average has remained above 6% since September 2022.
Meanwhile, the average mortgage rate in New York on outstanding mortgages was 4.1% as of May, making it less attractive to take on a new mortgage, according to data from Cotality, an Irvine, California-based property data and analytics firm.
Molly Boesel, senior principal economist at Cotality, believes long-term interest rates, such as those offered on mortgages, won't fall significantly while investors' expectations for inflation remain above the Federal Reserve's 2% target.
"I don't really see mortgage rates coming much below where they are now," she said.