New York housing market could be cooling off

WEST BABYLON, N.Y. - Are there signs of the housing market slowing down? New data released by the U.S. Census Bureau and Department of Housing and Urban Development this week show sales of newly built homes dropped in June to the lowest since the first month of the coronavirus pandemic in early 2020.

On Long Island, real estate agent Craig Winters of Keller Williams Points North is finding for the first time in months that more people are putting their searches on hold.

"We were seeing a lot more houses with 20-plus offers and yes with some over 70," he said. "Still plenty of offers but 10 or so to the teens. Some may be a little less. I think people are starting to get tired waiting in lines, bidding very high on houses, and not having an offer accepted."

Skyrocketing construction costs also contribute to high prices for homes, according to experts. The cost of lumber spiked more than 300% during the pandemic. While the cost has come down since the height, it is still about 75% above the 2019 average.

This trend coupled with the foreclosure moratorium set to end on July 31 could bring more homes on the market and may also impact the high housing prices, according to economist Dr. Martin Cantor.

Get breaking news alerts in the FOX 5 NY News app. Download for FREE!

"You have the supply chain and an increased cost of lumber and the components put in a new home. And that is increasing the prices and making it a little bit unaffordable for new buyers," he said. "When you have more supply than existing demand, the housing prices have to go down. That's pure supply and demand. Combine that with the federal reserve policy, we might see a flattening out of the new housing and existing home prices."

Sign up for FOX 5 email newsletters

 So what can buyers and sellers expect?

"I wish I had a crystal ball but I think, at this point, prices will more or less plateau, smaller dips than we've seen," Winters said. "As far as the big climb — I think that's over."

Experts say the future of mortgage rates, currently at historic lows, will also play a big role in the future of the industry.