Currently, the Fed has maintained its benchmark interest rate at a 23-year high to combat inflation, resulting in elevated mortgage rates. This has deterred many potential buyers, especially those with limited funds. Meanwhile, existing sellers, benefiting from historically low mortgage rates of around 3 percent, have been reluctant to enter the market, fearing higher rates upon purchasing a new property.

A rate cut by the Fed could theoretically prompt more sellers to list their apartments. However, such a move might not substantially alter the landscape for buyers. Lower interest rates typically drive up demand, potentially offsetting any increase in available listings.

The primary challenge facing NYC’s housing market remains low inventory levels. Compared to a peak of 22,153 units in October 2020, there were only 14,740 homes available for sale in January of this year. So, even with a rate cut, buyers may not experience significant relief. While bidding wars might diminish, the overall cost of purchasing property in NYC is expected to remain high.

(brickunderground.com, picture: Fung Martin)