Long Island Housing: Why Prices Won't Budge

Long Island home prices hit all-time records in August 2026 — a median of $911,000 in Nassau County and $760,000 in Suffolk County — even as the average 30-year fixed mortgage rate climbed toward 6.76% the week of Sept. 10 (Newsday). The textbook pattern is that higher rates cool a market; here, they've done the opposite — not because buyers grew richer, but because the region's inventory drought is so severe that sellers hold the power to set prices.

That is the puzzle at the heart of the Long Island market this fall. While much of the country has cooled under higher rates, Long Island was named the country's strongest seller's market by Redfin — buyers outnumbered sellers by 36.2% in July, 11,958 buyers against just 7,631 sellers (Newsday). The reason is a structural one: the market's inventory shortage is not easing, and sellers are holding prices high because they have little reason to move.

The inventory drought is a lock-in effect

The single biggest reason prices won't fall is that Long Island's shortage is self-imposed. Most owners financed their homes when rates were in the twos and threes, and they are not giving that up to buy a new home at rates near 7%. It's a choice, not a coincidence.

"A lot of people refinanced their mortgages when the rates were in the twos and threes, and now rates are in the sixes or sevens," said Jeffrey Memisha, a licensed sales associate at Realty Advisors Inc. "Most people don't want to sell, even though they'll get a lot more money than what they bought their house for, because where are they going to go?" (KeyCrew)

The math is stark. The average residential mortgage rate in the U.S. among existing loans was 4.4% in the first quarter of this year, and two-thirds of borrowers hold a rate of 5% or less, according to Federal Housing Finance Agency data cited by Newsday (Newsday). Replace a 3% pandemic loan with a 6.76% one and the monthly payment on a similar house jumps by a third or more — for most owners, moving simply doesn't pencil out.

The lock-in effect is where supply went

The single most important number on Long Island this fall isn't the price — it's the inventory. An acute shortage of homes for sale is what keeps prices climbing, and the engine of that shortage is the owners who refuse to sell.

Most Long Island homeowners refinanced during the pandemic when rates fell into the twos and threes. Those loans are far cheaper than anything available now — the average 30-year fixed rate was 6.76% for the week ending Sept. 10, according to Freddie Mac — so those owners stay put rather than trade a 3% mortgage for a 6.76% one (Newsday). Move-up buyers, downsizers, and empty-nesters who would normally list their homes are sitting on them instead.

The result is a market dominated by necessary moves rather than discretionary ones. "Most of the people who are making moves on Long Island are moving to Long Island or moving from somewhere else on Long Island to another house here," Memisha said (KeyCrew). People aren't leaving; they're locked in place.