Long Island home prices rise to record highs in August

Long Island home prices climbed to new highs in both counties for at least the third straight month in August, as the limited supply of homes continued to fuel one of the country’s hottest housing markets.

The median price of a single-family home in Nassau County increased 5.4% to a record $875,000 last month, surpassing the previous month’s record high of $860,000, according to data released Friday by OneKey MLS. Two years ago, the median in Nassau County was $750,000.

In Suffolk, the median home price rose 5% to $714,000 compared with a year ago, setting a new high for the county for the fourth consecutive month. The median was just $625,000 two years ago.

Home prices have defied some agents' expectations, rising steadily month after month despite predictions they might level off, said Gerald O'Neill, an associate broker at Signature Premier Properties in Amity Harbor.

“People have been saying for a while, 'This is going to slow down. It has to plateau.' And it never did," he said. 

Tight inventory pushes prices higher, even as rates fall

Homebuyers might have reason to be optimistic for the fall, as mortgage rates started to decrease in August. The average 30-year fixed rate fell this week to 6.35%, its lowest level since October, according to mortgage giant Freddie Mac.

The drop will boost house hunters’ buying power and more families could qualify for mortgages as rates drop. The decline from the 30-year rate’s 2025 high of 7.04% in January translates into savings of nearly $229 a month on a $500,000 mortgage.

Investors widely expect the Federal Reserve to cut its benchmark interest rate by a quarter-point on Wednesday, but the Fed doesn't directly control mortgage rates, and a cut doesn't guarantee rates will fall further.

In fact, mortgage rates rose last year after the Fed began cutting its key rate last September. That's because mortgage rates typically move in the same direction as the yield on 10-year Treasury bonds. Both of those rates tend to rise when investors expect higher rates of inflation and fall when there's a greater likelihood of a recession.

Even if rates do fall, it may not offer much relief for buyers, said Cory Knopf, an associate broker at Compass in Oceanside — they could simply draw more buyers into the market and drive prices even higher.

That would give sellers further leverage on Long Island, which Redfin recently ranked as the second-strongest seller’s market in the country.

“Prices are continuing to rise, multiple offers are coming in more than they were just two months ago,” she said, “and properties are coming on the market and going as quickly as they’re coming.”

A shortage of homes for sale has driven prices higher. That trend continued in August. There were 5,072 single-family home listings on Long Island at the end of last month, which was down 7.4% compared with last year, according to OneKey data.

The downward trend in rates would provide a greater benefit to buyers if it convinces more sellers to list their homes, creating greater balance in the market. But that outcome is far from assured, said Richard Haggerty, CEO of OneKey MLS.

"It remains unclear whether rate reductions will have a meaningful impact on the market — and at what percentage point that impact might take hold," he said in a statement. "Whether these changes will be sufficient to bring more inventory to market is still an open question."

A lack of inventory has also led to limited growth or declines in the number of transactions. In Nassau, the number of closings rose by 1.4% to 882 in August compared to the same month a year earlier. In Suffolk, the number of closed sales fell 6.9% to 1,098 compared with August 2024. 

O’Neill believes that the market has started shifting in favor of buyers on Long Island but it may be a few more months before that is reflected in sales data. That’s because OneKey’s data reflects the closing of deals that may have been agreed to months ago. He said he has seen lower attendance at open houses and fewer homes selling for tens of thousands above their asking prices.  

That’s especially true of higher-priced homes, while attractive homes at the entry-level end of the market continue to sell for well above their asking prices, he said.

“Everybody seems to get a sense that maybe we hit the top,” he said. “There’s buyer resistance for prices to go any further.”