Didn’t get that raise this year? Suppose you’re looking to buy a home in New York City.
In that case, there’s a bright spot: Declining mortgage rates are leading to a lower salary needed to buy a home in the Big Apple, including in Manhattan, according to a report released on Tuesday from the real estate website StreetEasy.
The report explored the minimum income needed to afford a home in each borough, as well as New York City as a whole. The research found that the recent decline in mortgage rates — which was down to 6.5% as of the last week of August — led to a $10,625 decline in the minimum salary needed to buy a home here compared to a year ago.
Could this be a good time to buy in Manhattan?
Falling asking prices, too, helped lower the necessary salary to purchase a new home. In Manhattan, the income needed to afford a home in the borough declined $33,593 as of August, year over year.
The research shows that the income required to afford a median-priced home in Manhattan is now $308,449. But that number drops significantly to $110,233 for buyers looking to purchase a median-priced home in the lower third of the NYC market as of August. In other words, homes priced below $730,000.
The nutshell? The StreetEasy report shows that now might be the season for house hunting in Manhattan, as housing options increase at the same time mortgage rates are falling.
There is additional good news for potential Manhattan home buyers. The income required to buy a home dropped the most in Manhattan, where buyers today can earn $33,593 less than they did one year ago if they want to shell out money for property, thanks to the declining asking prices in the borough.
But it is not all sunshine. Manhattan still needs to be in reach for many buyers, as an income of at least $308,449 is needed to afford a median-priced home, the report shows.
Meanwhile, citywide, only 15% of households made a combined income of $200,000 or more, according to U.S. Census data that StreetEasy used. But this still puts them within range of affording a median-priced home in the city.
And, according to the report, there are many homes available in the New York City that are, in fact, priced below the median. Many of these homes would still require a combined household income in the six-figure range. To afford a median-priced home in the bottom third of the market, a buyer must have an annual household income just shy of $95,000, which encompasses about 39% of all households in NYC.
The overall outlook for NYC?
Throughout the Big Apple, house price cuts are more prevalent than last year, which, according to StreetEasy, is one of the emerging signs that asking prices have likely “reached their peak in NYC.”
Slow and steady can win the home purchasing race, too, as sellers sometimes lower their prices the longer their homes are on the market.
For more information about the housing market in NYC, visit streeteasy.com.
