Zillow New York data indicates a stabilizing market with modest price declines and reduced inventory. Home values dipped 1.2% year-over-year in Q3 2023, averaging $1.05 million, while active listings fell 15% to 8,200 units. Buyer demand remains subdued due to higher mortgage rates and economic uncertainty.

The stabilization reflects a balance between supply constraints and cooling demand. Inventory levels, already at a 12-year low, have further tightened, pushing median time on market to 85 days (up from 62 days in 2022). Zillow’s Price Index shows a 0.8% quarterly decline, contrasting with the 3.5% annual surge in 2022. This moderation aligns with broader trends: the Federal Reserve’s 5.3% average 30-year mortgage rate in Q3 2023 (up from 3.1% in 2022) and a 20% drop in pending home sales year-over-year. New York City’s 2.1% population growth (2020-2023) has not offset outmigration, particularly among younger adults, reducing long-term demand. Meanwhile, construction delays and zoning reforms have limited new housing supply, exacerbating affordability challenges. Data from the New York Association of Realtors confirms a 30% decline in first-time buyer transactions since 2022, further constraining market momentum.

This equilibrium stems from structural factors. The U.S. Census Bureau reports New York’s 2022 median household income at $73,000, below the U.S. average of $78,000, yet home prices remain 5.8x annual income—higher than the 3.8x national ratio. This disconnect limits entry-level buyers despite low inventory. Additionally, Zillow’s rental affordability index shows 45% of NYC renters spending over 50% of income on housing, pressuring potential buyers to prioritize savings over purchases. The combination of elevated prices, reduced affordability, and economic headwinds has created a buyers’ market, with price cuts averaging $15,000 per home in Q3 2023 (Zillow Data). While short-term volatility persists, the market is poised for gradual recovery as mortgage rates stabilize and inventory adjustments unfold.