How Are Interest Rates Affecting Home Sales on Long Island?

How are interest rates affecting home sales on Long Island?
Interest rates play a major role in the real estate market, influencing both buyer demand and seller strategy. On Long Island, shifts in rates have reshaped affordability, negotiation trends, and overall market momentum. Eric Berman REALTOR explains how today’s rates are impacting local sales and what sellers can do to adapt.

The Connection Between Interest Rates and Buyer Demand

When mortgage rates rise, monthly payments increase—reducing how much buyers can afford. Even a 1% rate change can make a major difference.

Example:

• At 5%, a $700,000 mortgage costs about $3,758/month.

• At 7%, that same loan costs about $4,657/month.

This roughly $900/month difference can price out a significant number of buyers, especially first-time purchasers.

What’s Happening on Long Island Right Now

1. Fewer but More Serious Buyers

Higher rates have reduced casual shopping, but motivated buyers—often with larger down payments—are still active.

2. Stabilized Prices in Some Areas

While prices have stopped soaring, they remain steady due to limited inventory. Sellers who price correctly are still closing deals quickly.

3. Increased Competition for Well-Priced Homes

Homes priced realistically within market value continue to attract multiple offers, particularly in desirable school districts and commuter-friendly towns.

How Sellers Can Adapt to High Interest Rates

1. Price Strategically

Buyers are more price-sensitive now. Setting your price slightly below peak values can increase showings and offers.

2. Offer Incentives

Consider offering:

• Credits toward closing costs

• Rate buydowns (covering a portion of the buyer’s mortgage interest)

• Flexibility with move-in dates

These gestures can make your home stand out in a cautious market.

3. Highlight Value, Not Just Price

Emphasize features that justify your asking price, such as energy-efficient systems, renovated kitchens, or proximity to transportation and schools.

How Interest Rates Affect Time on Market

• Lower Rates (Under 5%): Faster sales, more bidding wars.

• Moderate Rates (5–6%): Balanced market with stable activity.

• Higher Rates (7%+): Longer market times, but still opportunities for well-marketed, well-priced homes.

The Long Island Advantage

Despite rate increases, Long Island remains one of the most sought-after suburban markets due to:

• Proximity to NYC

• Strong public schools

• Lifestyle amenities (parks, beaches, marinas)

• Limited new construction keeping supply low

These factors continue to support steady home values even as affordability challenges rise.

How Eric Berman REALTOR Helps Sellers Navigate Rate Changes

Eric helps clients stay ahead by:

• Analyzing local data to price listings competitively

• Coordinating with lenders to help buyers explore financing solutions

• Adjusting marketing strategies based on rate-driven buyer behavior

• Offering clear communication to keep expectations realistic and positive

Final Thoughts

Interest rates may be higher, but the Long Island housing market remains active for well-prepared sellers. Success now depends on flexibility, accurate pricing, and expert guidance.

Want to discuss how today’s market impacts your sale?

Contact Eric Berman REALTOR today to create a pricing and marketing strategy tailored to current Long Island conditions.

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How are interest rates affecting Long Island home sales? Eric Berman REALTOR explains how higher rates shape buyer demand, pricing, and seller strategy.