High Prices, Interest Rates Put Homeownership out of Reach for Many CNY First-Time Homebuyers

The combination of rising median home prices in Central New York with higher interest rates and low inventory means owning a home is out of reach for more first-time homebuyers. In fact, a recent Marist poll shows nearly three in four New Yorkers think affordability of housing is a major problem, and that policymakers have not adequately addressed the issue. County and state incentive programs aim to help, but it it’s not clear if and when we’ll see relief.

The median price of a home in the Syracuse area is close to $220,000. Numbers form the Greater Syracuse Association of Realtors show as little as 18 months ago, it was around $170,000. Also in that time, interest rates more than doubled to eight percent. Association president Nancy Quigg says rates are easing some.

“I don't ever think we'll get to three percent. We can't the economy can't afford to do that anymore," Quigg said. "But I think if we get down to six percent, you're going to have more people in the market more people qualify for the home that they want.”

But she doesn’t see prices dropping much, which means the market is not favorable for first-time buyers looking for a home in the $150,000 to $200,000 range. Quigg says the challenge is on the state’s radar.

“New York State is trying to get an incentive past where the first-time buyer qualifies for some monies that could be put aside towards purchasing a house," Quigg said. "We're trying to get that bill passed.”

Meanwhile, Onondaga County is trying to tackle the problem by incentivizing homebuilders. County Executive Ryan McMahon says they face the same challenges.

“Remember, developers are paying higher than eight percent i you're paying eight percent for your mortgage," McMahon said. "The challenge is we need more units. We need all the above. It's part of our comprehensive plan center-driven development. It's going to be the key one of the key challenges for Micron moving forward. But it's a problem today.”

 The county’s O-Chip program aims to assist private and not-for-profit developers by filling the gap between the cost of building a home and selling it for a more reasonable price. He says the $10 million pot of money hasn’t been used just yet.

“We're not going to tax for more money until it's used and to make sure that we get the results we want," McMahon said. "Our O-Chip program, two rounds, 393 new units coming online with projects from senior housing to affordable housing to mixed-use, market-rate housing.”

 McMahon says it’s one of the few ways the county can spur housing development since it can’t control interest rates or zoning.

This story was originally published on 12/6/2023 on WAER.