The 2025 NYC real estate market has demonstrated remarkable resilience, effectively bucking national headwinds of sluggishness and the "lock-in" effect. While U.S. home sales dipped slightly year-over-year, New York City—particularly Manhattan—saw a 5.8% increase in new contract signings by mid-year.
Macroeconomic and Interest Rate Realities
The market has adjusted to a "new normal," where the era of near-zero interest rates is firmly behind us.
Mortgage Rates: By December 2025, the 30-year fixed rate stabilized between 6.12% and 6.23%, with jumbo loans trending slightly higher at 6.40% to 6.57%.
Monetary Policy: Federal Reserve rate cuts in late 2024 and again in October 2025 boosted buyer confidence and revived contract activity. Inflation is projected to cool gradually, declining from 3.0% in 2024 toward 2.1% by 2027.
Price Warning: Waiting for rates to fall further may backfire. As rates decline, competition intensifies and prices tend to rise. National forecasts suggest existing home sales could increase by over 10% in 2026.
Borough-Specific Market Dynamics
The recovery remains uneven, with notable divergence by borough and price segment, especially in the luxury market.
Manhattan: The Luxury Engine Refires
Manhattan continues to operate as a bifurcated market. The average sales price rose nearly 3% to $2.066M, largely powered by the luxury segment. Yet the median sales price fell to $1.1M, the lowest fourth-quarter figure in five years, showing pressure in the mid-market. Inventory is tightening, with active listings down about 8% year-over-year.
Brooklyn: The Seller's Stronghold
Brooklyn remains the city's core growth engine.
Inventory Shortages: Inventory shortages have become severe, with listings dropping over 28% year-over-year.
Months of Supply: Months of supply fell to just 2.1 months, creating intense bidding environments.
Price Increases: One-to-three family homes in the top price tier saw a 25%+ annual price increase, hitting a median of $2.7M.
Queens: The Search for Value
Queens continues to attract buyers priced out of Brooklyn. The median home price climbed to $630,000, up 11% year-over-year, with areas like Ridgewood experiencing surging search activity.
The Bronx: The High-Growth Frontier
The Bronx is now the city's percentage leader in price appreciation.
Price Growth: Prices increased 17% year-over-year.
Median Price: The median home price reached $655,000.
Days on Market: Homes sold faster, with days on market dropping to roughly two months.
The Rental Market Catalyst
New York's tight rental market is still a major driver pushing renters into homeownership.
Vacancy Rates: Vacancy rates remain extremely low, between 1.4% and 1.75%.
Median Rents: Median asking rents hover around $3,500–$4,000.
Rent Escalation: Escalating rents make fixed mortgage payments increasingly appealing, encouraging renters to transition into buyers.
2026 Outlook and Strategy
The market is positioned for continued but moderate growth.
Mortgage Rate Stability: Mortgage rates are expected to stabilize between 6.0% and 6.5%.
Market Strength: Predictions of a market crash have not materialized—if anything, the market has strengthened.
Hyper-Local Strategy: Winning in 2025 will require a hyper-local strategy, recognizing that demand patterns differ significantly from borough to borough.