NYC's Homeownership Hotspots II: Shifting Trends and New Realities

Cash Buys. Building on a trend noted in our previous report, cash purchases have once again outpaced mortgage transactions citywide. Queens led in overall volume, with the highest concentration of cash buys occurring in long-established residential neighborhoods: Council District 19 (College Point, Whitestone, Bayside) recorded 511 cash transactions, followed by Council District 20 (Flushing) with 399, and Council District 23 (Bayside Hills, Bellerose, Hollis Hills, and Fresh Meadows) with 397.

Flushing – particularly Census Tracts 871 and 869 – remains a hotspot for sales, especially within the condo market. This intense competition now appears to be translating into all-cash offers, likely favored for their speed, certainty, and simplicity.

While Queens led in total cash purchases, the Bronx posted the highest cash-buy rate, with roughly 17 cash deals for every mortgaged buy. In Council District 13 (West Farms, Soundview, Throgs Neck, Pelham Bay), for instance, there were 320 cash purchases compared to just 5 purchases with financing. Across Manhattan, historically a hotbed for cash transactions, nine out of ten homes priced over $3 million were purchased in cash. The dominance of liquid capital this period underscores how cash reigns supreme in New York City’s most competitive housing segments, offering buyers leverage not just in price, but in perceived reliability.

Foreclosure Filings. Foreclosure activity in New York City surged in the first half of 2025, marking a sharp departure from late-2024 levels and ending the “quietest foreclosure quarter in five years.” Between January and July, 3,587 lis pendens (or foreclosure filings) were filed across the five boroughs, nearly double the 1,883 filed during the second half of 2024. According to reporting from PropertyShark, two-family homes were at the center of this uptick, likely reflecting growing strain in neighborhoods where homeowners rely on rental income to stay current on their mortgages.

Brooklyn led the City in foreclosure filings for this period, with 1,721 lis pendens filed. Southern Brooklyn, in particular, saw some of the steepest increases in filings. Council District 14 (Flatbush, East Flatbush, and Midwood) rose from 91 filings in late 2024 to 187 this period. Meanwhile, Council District 46 (Canarsie, Flatlands, and Bergen Beach) climbed from 100 filings to 187. Notably, Brooklyn also contained the five most distressed census tracts during this period, including one that saw 167 filings alone, nearly surpassing the total number of foreclosure filings in all of Manhattan.

Queens and Staten Island also emerged as foreclosure hotspots. Council District 27 (Cambria Heights, St. Albans, and Springfield Gardens) increased from 200 last period to 222 filings, while Council District 28 (Jamaica and Rochdale) remained elevated with 145 filings. Meanwhile, Staten Island’s District 49 (St. George, Stapleton, Port Richmond) saw the sharpest local spike, jumping from just 22 filings in late 2024 to 159 filings.

The continued prominence of Council Districts 27, 46, and 31 across reporting periods underscores persistent mortgage stress in southeast Queens and Brooklyn. At the same time, the jump in filings in Staten Island’s District 49 suggests foreclosure pressure is expanding into previously more stable areas.

Wrapping Up

The following factors are likely to impact the City’s housing market in the period July 1, 2025, to December 31, 2025.

NYC has been defying national housing trends—but for how long? Home sales typically surge in the spring and summer months, but were sluggish in most of the country for the first half of 2025 (see here and here). Luckily, in New York City, things played out a little differently.

The City’s housing market has reportedly held strong this summer, with the median listing price for a home in New York City up 2.4 percent from last year. A report out of Zillow, however, indicates that new home listings fell in August, with sellers putting approximately 7 percent fewer homes up for sale than in July 2025. (Recent reporting from the Federal Reserve Bank of St. Louis upholds this finding at the national level.)

In Manhattan, affordability has been improving, with the projected monthly mortgage burden falling 7.4 percent from a year ago due to new listings with lower asking prices. An exception to this is the Two Bridges neighborhood, which, in August 2025, posted home sale prices that were up 11.8 percent compared to last year, and selling for a median price of $2.4M. In fact, Two Bridges was one of 24 neighborhoods in New York City that saw its median sales price double over the last 10 years, according to a recent PropertyShark analysis, experiencing a 288 percent increase.

There have also been strong sales postings in Brooklyn, with homes sold in the borough during the month of August receiving a median of nearly 100 percent of their asking price.

That said, market research indicates that homes nationwide are staying on the market much longer, for an average of 58 days. In New York City, however, the “days-to-pending” figure is 32. Still, speed doesn’t always equal savings. A recent analysis found that home sellers spend an average of $67,000 on selling expenses, including $21,024 for repairs, $27,895 for agent commissions, and $8,217 for closing costs. That’s a far cry from the anticipated $18,557 (on average) that sellers expect to spend.

While sellers face steep costs, buyers aren’t faring much better, especially amid rising home prices and a tight inventory. In response, New York State enacted legislation (A3009C) in May 2025 aimed at improving affordability for individuals and families. The law restricts institutional investors, or “covered entities,” from purchasing single- and two-family homes for a 90-day period. (If a seller changes the asking price on a property, this 90-day clock resets.) The law also prohibits certain tax deductions, such as depreciation and interest, on specified properties. These are deductions that investors typically rely on to offset portfolio costs. Covered entities must also now disclose their status to the seller (or seller’s agent) and to the State’s Office of the Attorney General when making a purchase offer on a single- or two-family residence.

The law defines a “covered entity” as any of the following: 1) a business or combined group that owns 10 or more single- or two-family residences; 2) one that manages pooled funds or acts as a fiduciary for investors; or 3) one with $30 million or more in net value or assets under management in a given year.

The 90-day waiting period took effect July 1, 2025. The tax deduction restrictions were effective upon signing and applicable to the taxable year beginning on January 1, 2025. (Federal tax deductions are not impacted.)

To cap it off, the law directs the New York Department of State to issue public notices when establishing “cease-and-desist zones,” which allow homeowners to opt out of unsolicited offers to sell their homes. However, the law does not specify a clear enforcement mechanism for violations of this provision. (For more information about the law, see this helpful analysis.)

Nevertheless, homeowners can likely anticipate stalled growth in the market value of their homes in the coming year, or, put differently, diminished growth in their unrealized equity. According to Cotality’s latest Homeowner Equity Report, U.S. homeowners have lost $9,200 in home equity over the past year. (In New York State, things looked better, with borrowers gaining an average of $7,000 in home equity year over year.) The overall decline in unrealized equity is attributed to historically elevated mortgage rates and high home prices, which together have cooled demand. As a result, U.S. homeowners in 2024 only gained $4,500 in market value (on average), compared to $25,000 in 2023.

For prospective buyers, slower home value appreciation could translate into slightly improved affordability as price growth continues to cool. To this end, Pathways to Homeownership Today, a report we released earlier this year, offers additional insight and practical guidance for those preparing to enter the market. (See page 74 for a set of smart home-buying tips.)

Mortgage rates, aging buyers, and a cooldown in construction. On the mortgage-rate front, uncertainty clouds the outlook. Rates began falling in June, reaching their lowest level in three years by mid-September. This drop was partially driven by fluctuations in the 10-year Treasury yield. Which had been edging downward amid growing concerns about slower economic growth and a potential recession. As a result, on Wednesday, September 17, reports showed that applications to refinance home loans had surged, up 58 percent from the previous week and a whopping 70 percent higher than the same week a year earlier. However, that same day, the Federal Reserve voted to lower interest rates by a quarter percentage point (to a range between 4.00 percent and 4.25 percent), and mortgage rates ticked upwards again by 9 basis points. (One basis point equals one-hundredth of a percent.) By the end of September, mortgage rates were on the rise again.

There are some other interesting trends around home sales worth noting. In July, research from Deutsche Bank’s macro strategy team found that 46 percent of all U.S. home purchases in 2024 were made by buyers aged 60 and older. There were actually more buyers aged 70 and above (20 percent of buyers) than there were buyers under the age of 35 (approximately 15 percent of buyers). Another interesting trend on the rise, according to several housing industry studies (JW Surety Bonds, Bankrate, Zillow), is co-buying, or the practice of purchasing a home with someone other than a romantic partner, i.e., with a friend, family member, or colleague. In 2024, approximately 15 percent of home purchases were co-buys.

Another key trend involves residential building permits, widely considered to be a “critical” economic variable for predicting recessions. Nationwide, permits for single-family homes began to slip seven months ago (in March) due to a high inventory of unsold homes. In response, builders began to pull away from new projects, with fewer and fewer permits being filed each month. Consequently, the number of single-family permits in New York State in July was reported to be down 2.4 percent from last year (and down 45.8 percent for multi-family homes). Meanwhile, New York City ranked first in the year-over-year decline in building permits for multi-family homes, with permits down 38 percent compared to last year.

The stubborn cost of getting by. In August, core inflation was reported to be holding steady at 2.9 percent, according to the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure. (For reference, the Federal Reserve targets a 2 percent inflation rate.) Some of the largest monthly gains were seen in the categories of food (up 0.5 percent), financial services and insurance (up 0.6 percent), and energy goods and services (up 0.8 percent). Housing costs also edged up by 0.4 percent.

These broader inflation trends are more than just facts and figures; they manifest in everyday household expenses and influence homeowners’ ability to keep up with their housing costs. Recent reporting from Gothamist offers a neighborhood-level look at how these inflation figures are reflected on grocery receipts, for example. Over the past few months, Gothamist reporters have visited four grocery stores in each borough to track the prices of household staples and investigate what’s driving price differences across the City. They found, for example, that beef prices could vary by as much as $7 per pound, depending on location. In contrast, a half-gallon of whole milk was the most consistently priced item, showing little to no fluctuation across stores from month to month. The report identified several key factors behind local price differences: supply chain disruptions; climate change and weather-related events (like droughts); the impact of tariffs; rising overhead costs (such as gas, labor, rent, and business insurance); competitors’ pricing strategies; and neighborhood demographics. For many New Yorkers, the struggle to keep up with the rising cost of food, insurance, and transportation has intensified their housing-cost burden, especially in neighborhoods where rent is already high and housing stress is most acute.

Regarding tariffs, on Monday, September 29, President Trump announced 10 percent tariffs on imported timber and lumber, in addition to 25 percent duties on kitchen cabinets, bathroom vanities, and upholstered furniture. The tariffs are set to go into effect on October 14, and should not be confused with the tariffs we reported on earlier this year. (In fact, those tariffs were exempted at the last minute, somewhat in relation to the United States-Mexico-Canada Agreement (USMCA).) The duties, which also go into effect on October 14, are set to increase on January 1, 2026, to 30 percent for upholstered wooden products, and to 50 percent for kitchen cabinets and vanities imported from countries that fail to reach an agreement with the U.S.

Luckily, there’s currently a surplus of Canadian lumber in the U.S. due to producers and importers trying to get ahead of tariffs earlier this year, coupled with weak demand in the housing market. That surplus, however, won’t last for long; at which point, “…constructing a new home, already an expensive endeavor, will become even more expensive” – just as we reported earlier this year.

In mid-September, the creators behind the @stockmktnews Substack newsletter posted an ominous foreclosure graphic to their X account. When Senator Elizabeth Warren amplified the post, the issue quickly entered the mainstream. The key takeaway? Google searches for “help with mortgage” have now surpassed their peak during the 2008 housing crisis. Coupled with the surge in foreclosure filings in New York City earlier this year and the persistence of inflation, this will be an area to watch closely.

Insurance, climate risk, and the future of homeownership. Finally, some news around property and flood insurance, two of the most pressing issues related to homeownership today.

In February 2025, during his semiannual testimony to Congress, Federal Reserve Chairman Jerome Powell issued a stark warning: within the next 10 to 15 years, some regions of the country may become uninsurable, and therefore unmortgageable, due to escalating climate-related events. In areas deemed by banks and insurers to be “too high risk,” prospective homeowners may be unable to secure a mortgage at all.

For context, homeowners’ insurance is typically required to obtain a mortgage, as it covers the cost to rebuild in the event of damage. Proof of insurance is mandatory before a home loan can close. Additionally, if a property is located in a designated high-risk flood zone and is subject to a federally regulated mortgage, flood insurance is also required.

Evidence already suggests that financial institutions are responding to climate risks: banks have started revising the models they use to assess default risk, which in turn affects mortgage rates. As climate-related events grow more frequent and severe, access to affordable housing finance may be further strained.

In an effort to address related concerns, New York lawmakers introduced the Insure Our Communities Act (S186/A3842A) in January 2025. Still in committee in both the State Senate and Assembly, this first-in-the-nation bill seeks to use the State’s regulatory authority over insurance markets to address growing coverage gaps and rising costs. If enacted, it would introduce new consumer protections against bluelining (the practice of increasing prices or withdrawing services from areas considered to have high environmental risk by financial institutions). Under the bill, applicable homeowners would be protected from sudden non-renewals and, in some cases, from steep premium increases. Insurers would also be barred from canceling coverage for one year following a disaster, and would be required to disclose rate and coverage data down to the census-block level.

Notably, the bill would further prohibit New York-based insurance companies from underwriting or financing new fossil fuel projects, and require them to disclose their fossil fuel investments and phase them out within five years. (For further analysis, see the following coverage: Center for International Environmental Law 2024; Third Act 2025; New York Focus 2024.)

Lastly, in August, New York State lawmakers announced an investigation into the state’s rising property insurance premiums, citing affordability, changing climate patterns, and the reality of more frequent and severe climate-related events. The inquiry aims to identify the underlying causes of premium increases and ensure New Yorkers are not being overcharged. The investigation is anticipated to continue through the fall and will culminate in a joint hearing, followed by a published report of the findings and recommendations.

We will see you again in late February (to mid-April) of 2026.