What happens when sellers are stuck, buyers are cautious, and mortgage rates just won’t budge?
That’s not a riddle—it’s the reality for New York City real estate this summer. Welcome to the season of frozen momentum, where low inventory, high mortgage lock-ins, and mixed economic signals are creating one of the most nuanced markets we’ve seen in years.
Let’s break down the macro and micro forces shaping NYC real estate right now, and what it means for your next move.
Supply Is Slipping…That’s the Story
Right now, Manhattan supply is sitting 10% below where it needs to be by the end of July. And based on historic patterns, we’re likely heading toward a seasonal low below 5,700 listings by early September; lower than the troughs in 2023 and 2022.
Here’s the kicker: demand is also down. But because supply is falling faster, UrbanDigs’ “Pulse” index is moving upward, falsely signaling a more competitive market. This isn’t buyer activity pushing the market up, it’s just inventory pulling back faster than deals are getting done.
So, if you’re wondering why the market feels slow but the data looks oddly strong, that’s why.
Buyers Are on the Fence, And Who Can Blame Them?
Contract activity tells the real story. Over the last 30 days, volume is down to 933 deals on average, about 30 short of where it should be. That’s a 5% dip year-over-year.
The market had solid momentum through early spring, but April deflated the bubble. Since then, it’s been a slow, steady leak. May and June didn’t bring the bounce many were hoping for. Some sellers are exiting the rental market or doing significant price reductions. While the rest are waiting it out till the fall.
And for many buyers, the silence is intentional. Why compete aggressively in a market that feels like it’s on pause?
Credit Spreads Signal Calm..For Now
Zooming out, credit markets show no sign of panic. Credit spreads (the difference between corporate bond yields and U.S. Treasuries) are near one-year lows.
In other words, investors aren’t pricing in risk. The passage of a major federal spending bill helped lower uncertainty and steady the market. While there’s always the chance of a rogue headline that rattles nerves, for now, the markets are leaning risk-on.
So what does that mean for the housing market? No immediate financial shocks—but no sudden tailwinds either.
https://www.creditspreadalert.com/
Rates Steady, Cuts Uncertain
The Fed Funds Rate is sitting at 4.25–4.5%, and odds of a July cut are practically zero. The market’s pricing in a 65% chance of a September cut, with maybe another one in December.
That’s not exactly a “rate cut cycle”, it’s more like a tap on the brakes.
If you’re hoping for sub-6% mortgage rates this fall, temper those expectations. We might get a little movement, but not enough to stir a wave of buyer urgency.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
Locked-In Mortgages Are Freezing the Market
Here’s the stat that defines 2025 so far: 71% of all mortgages in America have rates under 5%. That includes:
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20% under 3%
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33% between 3–4%
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18% between 4–5%
That’s a massive swath of homeowners who simply aren’t going anywhere. Why would they trade their low mortgage for one near 7%?
This “lock-in effect” is a national epidemic, but its impact on NYC is especially sharp. It is firmly contributing to low resale inventory, tight turnover, and a growing disconnect between what sellers want and what buyers will pay.
https://www2.optimalblue.com/obmmi
Nationwide Patterns Echo Manhattan’s Challenges
Even outside Manhattan, housing markets are showing stress fractures.
In many U.S. metros, prices are already correcting. Mortgage payments have jumped dramatically since 2021, and affordability is straining at the seams. Rent is the cheaper option in cities, so, what needs to happen to restore affordability?
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Mortgage rates would need to drop to around 5.5%
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Home prices would need to fall another 10–15%
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Or incomes would have to rise substantially—quickly
None of those seem likely on their own. Maybe a mix of all three nudges the market back into balance. But it’s going to take time.
https://x.com/NewsLambert/status/1941884063473631424/photo/1
Record Sales Prices Are Misleading
If you’re reading quarterly reports boasting record-high sales prices, yes, they’re technically accurate. But here’s the nuance: those contracts were signed three months ago, during a stronger market.
That orange line in UrbanDigs’ price data? It represents closings based on spring contracts. Meanwhile, their “listing climate index,” which measures real-time deal traction, has been dropping since May.
So yes, prices look high. But if you’re listing today, it won’t feel that way.
Will a Weak Dollar Bring Foreign Buyers Back?
The U.S. dollar has been sliding against major currencies. For foreign buyers holding Swiss francs, euros, or pounds, New York real estate just got cheaper, especially new developments.
In Swiss francs, NYC’s price per square foot is at a 10-year low.
So, could this fuel a wave of international investment in Q3 and Q4? Possibly—especially in luxury condos. It won’t solve the inventory crunch, but it could boost high-end liquidity and reset expectations for developers.
https://www.marketwatch.com/investing/index/dxy
Renters Win (For Now)
Let’s be real: renting still makes financial sense for many New Yorkers.
According to Zillow’s CPI rent index, the gap between renting and owning remains wide. That’s likely to persist through 2026 unless something drastic changes.
If you're on the sidelines, you’re not alone, and in many cases, you're being smart about it.
https://en.macromicro.me/collections/5/us-price-relative/49740/us-cpi-rent-zillow-rent-yoy
Low Volume Is the Real Threat
The biggest issue facing agents, buyers, and sellers alike? Volume. Not price.
Sales activity is down. Listings are light. And buyer urgency is tepid.
This is starting to feel a lot like the 2011–2013 stretch:a multi-year lull before the next run. It's not catastrophic; it’s just slow. And slow is tricky. You have to be strategic, patient, and honest about where you are in the cycle.
Final Thoughts: Plan Smarter, Not Louder
NYC real estate isn’t broken—it’s just adjusting. Think of it like traffic at a yellow light. Everyone’s unsure whether to accelerate or wait.
Whether you’re considering selling, timing a purchase, or exploring investment options, understanding the full picture matters now more than ever. Macro trends, mortgage math, and market mood are all moving parts and no one-size-fits-all advice works in this kind of environment.
Curious how all this applies to you? Let’s sit down and map out your best move, whether that’s now, next quarter, or next year. Because in a market like this, the smartest plan is always a personal one.