How to buy a house in New York

Thinking about buying a house in New York? The state’s market remains competitive, with inventories improving in many areas and prices that trend above the U.S. median – especially in and around New York City. This guide covers the latest housing trends, the top cities in New York, and each step of the home buying process in an attorney-driven market, including co-ops, seller's disclosures, and closing costs.

New York’s housing market: At a glance

Understanding housing market trends in New York

It's important to understand the New York housing market and be aware of key trends before buying a home. Prices sit 26% above the U.S. median, and demand remains strong, with 39.8% of homes selling above list price, according to Redfin. Inventory has improved statewide, but is tightest in New York City.

Home prices

New York's median home price of $550,200 is 26% higher than the U.S. median of $433,261, according to Redfin. Prices have increased 5.2% compared with last year.

A critical factor in buying a home in New York is location. Homes in and around New York City are going to be much more expensive than homes in other parts of the state. For example, Buffalo and Albany have median home prices of $210,000 and $285,000, whereas the median home price in New York City is $860,000.

Beyond location, other factors that can impact the value of a home are its property type, size, features, construction costs, and housing affordability regulations. Additionally, many homes require you to pay homeowners association fees or co-op fees.

To estimate how much home you can afford, use the Rocket Mortgage® home affordability calculator. You provide basic information, such as the location of the home you want to buy, your income, how much you have saved for a down payment and closing costs, your debts, and your credit profile.

Housing demand and inventory

The New York housing market is highly competitive, with 39.8% of homes selling above the listing price. Cities where the housing market is particularly fierce include Chili, East Rochester, and Perinton.

While the state's housing inventory has continued to improve, it remains very short in New York City. Housing underproduction and restrictive zoning laws add to the housing shortage.

Because of the complexities and challenges of buying in New York state, it's a good idea to find a real estate agent who can help you understand the market and guide you through the process. Agents are well-versed in market predictions and market indicators. They can help you narrow down your search and understand the intricacies of house-hunting and buying a home in New York.

Home buying seasons

In New York, late spring and early summer are peak times for higher inventories and active listings. However, buying a home in the fall and winter can also have its perks – such as potentially lower prices and less competition.

The best time of year to buy a house in New York hinges on your goals, capacity, and your budget and financial considerations. If you want to reap the perks of more homes to choose from – but also greater competition – then the warmer months might be better. However, if you'd like a deal and are okay with less inventory and viewing homes during colder months, then you might opt to house-hunt during the later months of the year.

Top cities to buy a house in New York

The best city for you to buy a house in New York depends on your financial situation, work and education, short- and long-term goals, and desired lifestyle. In figuring out where you might want to live, you might want to explore the following cities:

New York City

• Population: 8.48 million
• Median household income: $79,713
• Median home price: $860,000

There's a lot to love about living in New York City. Entertainment, culinary experiences, cultural attractions, and job opportunities may draw you to the Big Apple. However, you'll also find it to be expensive, with a high concentration of luxury properties and a low availability of affordable housing options.

New York City's housing market has seen a 6.2% increase in home prices compared to the previous year. The median days on the market hovers at 71.

Albany

• Population: 101,200
• Median household income: $61,390
• Median home price: $285,000

If you're seeking small-town charm, quaint architecture, and outdoor recreation and beauty, look no further than Albany.

While the state capital has seen a 3.6% increase in home prices over the past year, it remains a more affordable place to live, with prices that are below average. However, expect snowy winters, high humidity during the summer, and limited public transportation options.

Buffalo

• Population: 274,686
• Median household income: $46,458
• Median home price: $210,000

You can expect a thriving arts scene, rich history, and breathtaking architecture in this upstate New York city. While Buffalo's housing market is competitive, it remains affordable enough to appeal to first-time home buyers — as long as they don't mind winter weather, traffic, and fewer job opportunities compared with larger cities.

Rochester

• Population: 207,264
• Median household income: $48,618
• Median home price: $174,900

With its small-town vibes, walkability, emerging tech hub, and access to major academic institutions, Rochester might have caught your eye to buy a house. And while its housing market is very affordable – and well below the national average – it's still competitive. If you're a first-time home buyer who loves the outdoors and is a tech professional, you might want to consider this quaint city.

Syracuse

• Population: 145,573
• Median household income: $47,525
• Median home price: $210,500

Do you have a passion for winter sports and outdoor recreation? The college town of Syracuse could be a solid place to consider buying a home. While the housing market is very affordable – and well below the national and state averages – it's still somewhat competitive. However, bear in mind that there's limited public transportation and cold winters in Syracuse.

Steps for buying a house in New York

Understanding the New York home buying process can help you purchase a home in the Empire State with greater ease and confidence.

1. Get financially prepared

You'll want to get your finances in order before you house hunt. This helps you understand how much house you can afford and establish your parameters.

Start by looking over your budget to gauge how much you can afford in different cities in New York. You can use a mortgage calculator to figure out what your monthly housing payment would be if you bought a house with a specific price tag.

You'll also want to do the following:

• Check your credit. Your credit matters, even if you're applying for a loan without a specific minimum credit score. Conventional loans recently dropped their requirement for a specific minimum credit score. However, the better your credit, the better your chances of securing the loan amounts and favorable terms you desire.
• Know your debt-to-income ratio (DTI). This figure compares your monthly debt payments with your gross income. Generally, you'll need a DTI of no more than 36%, but the lower, the better.
• Plan for a down payment. This can be especially pronounced in large, expensive metropolitan areas, such as New York City. Plus, the higher your down payment, the less you need to borrow and the more affordable your mortgage payments will be.

2. Explore home loan programs

As a home buyer, you can choose from a handful of conventional and government-backed loan programs:

• FHA loans. Popular among first-time home buyers, FHA loans feature a down payment as low as 3.5% and low closing costs.
• USDA loans. Home loans backed by the U.S. Department of Agriculture are available to low- and moderate-income borrowers purchasing a home in designated rural areas. To qualify for a USDA loan, you must meet income eligibility and live in the house as your primary residence.
• Conventional loans. Conventional mortgages aren't part of a government-backed program. And while they usually cost less than FHA loans, they can be more challenging to qualify for.
• VA loans. Available to veterans, military personnel, and their surviving spouses, VA loans feature no down payment, low interest rates, limited closing costs, and no private mortgage insurance.¹ The loans are backed by the Department of Veterans Affairs.
• Jumbo loans. Jumbo loans are mortgages that exceed the loan limits, allowing lenders to sell them to Fannie Mae and Freddie Mac. Requirements will vary by lender.

There are also local loan and down payment assistance programs for eligible buyers.

For example, New York City's HomeFirst Down Payment Assistant Program provides first-time home buyers with up to $100,000 toward the purchase of their first home in one of the five boroughs. You'll need to qualify.

Additionally, the State of New York Mortgage Agency (SONYMA) has low-interest mortgages and programs to help you buy a home.

3. Get mortgage preapproval

Mortgage preapproval means that a mortgage lender has reviewed your financial information and credit history to determine your eligibility for a mortgage. In turn, they've conditionally agreed to loan you money. The preapproval letter includes the amount of the loan they're willing to offer and the rate, which is valid at the time.

It makes you appear like a more serious buyer who has their financial ducks in a row and is ready to make a purchase – and can help you stand out from the competition.

It's also a good idea to check current mortgage rates in New York. This provides a more accurate idea of what a home might cost. That way, you can gauge whether you've gotten preapproved for the amount you need.

4. Choose the right New York real estate agent

The home buying process can feel like a Herculean task. That's why working with a real estate agent with a longstanding track record and know-how about New York's various markets can help you jump through hurdles.

Currently, there are over 82,000 working real estate agents in the Empire State, so there's no shortage of real estate agents you can work with. However, you'll want to find one that suits your needs well. They may specialize in specific areas or types of homes. You can search for an agent on an online housing platform such as Redfin.

In New York state, dual agency is permitted. This means that an agent can represent both the buyer and the seller in a transaction. This can streamline the process in some ways, but it also can present a conflict of interest. One thing to note: full disclosure and written consent are required of both parties.

5. Shop for homes

New York and its home buying opportunities can feel vast – but your time is finite. To shop efficiently, select a target area in the state that suits your needs.

Ideally, work with your real estate agent. You can pore over listings on sites such as Redfin and the multiple listing service, and attend open houses. If you're unable to travel to the property you're interested in, schedule a virtual tour.

In your search, keep the following in mind:

• Education and job opportunities
• Crime rates and safety
• Basic info about the neighborhood
• Weather
• Cultural attractions and entertainment
• Recreation and amenities
• Transportation options
• HOA or co-op fees
• Property taxes

6. Make a home offer and negotiate

To make an offer on a home in New York, you need to provide the amount of money you can offer, as well as the appraisals, inspections, and other contingencies you'd like. You also may want to make an earnest money deposit.

One thing that's specific to the state of New York is that, under the Property Condition Disclosure Act, sellers need to provide information about known damages or defects. Alerting you to any known issues can help you make an informed decision about whether to proceed with making an offer.

And while it's not required by law, it might be a good idea to work with a real estate attorney to review the disclosure so you have a complete understanding of what's included in such an important document.

7. Proceed to close on your New York home

The final stage of the home buying process in New York is to complete the closing process. On closing day, you sign the final documents, receive the keys, and settle any remaining balance with the cash on hand. If a mortgage is involved, it can take anywhere from 30 – 60 days to finalize a home purchase. A cash process is usually quicker.

In New York, you can expect a lengthier process – think more like 60 to 90 days to close on a home. That's because New York's laws are more complex, and the standard process can be more extensive.

Closing costs in the state of New York can range from 3% – 6% of the home's purchase price. A home with a $300,000 price tag can cost you $9,000 to $18,000, while a home sold for $800,000 can range from $24,000 to $48,000.

Closing costs often include an appraisal fee, inspection fee, loan origination fee, loan processing fee, title search and insurance fees, homeowners insurance premiums, prorated property taxes, and HOA fees.

There are also special costs, such as the New York City mansion tax, which is an additional tax of 1% of the sales price on properties valued at $1 million or more.

You might also need to pay co-op and attorneys' fees.

FAQ

Here are answers to common questions about buying a house in New York.

Is it better to rent or buy a home in New York?

Usually, it's cheaper to rent than to buy a home in New York, especially in the short term. You won't have to worry about up-front costs, such as a down payment, closing costs, insurance, property taxes, and repair and maintenance costs. You can use the Rocket Mortgage rent vs. buy calculator to assess. Beyond the financials, it's essential to consider key factors, such as your lifestyle, short- and long-term goals, and your anticipated commitment to the area.

What are the advantages of buying a house in New York?

There are plenty of perks of buying a house in New York, including:

• Potentially high property value appreciation
• Stability and control
• Tax perks
• Excellent access to public transportation in many areas
• Diverse educational institutions, employment options, and culture

However, what's most important is to assess based on the features and factors that are most important to you. Additionally, you'll want to consider any potential drawbacks, such as a high cost of living, high property taxes, and issues related to air quality and pollution.

How long is the home buying process in New York?

In the State of New York, the time it takes to find and buy a home varies, but you can expect it to be anywhere from two weeks to three months. However, the typical time from acceptance of the offer to closing is longer than the standard. It can range from 60 – 90 days. Factors that can impact the timeline for purchasing a home include market inventory, your level of preparedness, and your ability to navigate the process effectively. Further, market conditions and the time of year can also impact the timeline.

How much money do I need to make to buy a house in New York?

You'll need a salary of about $150,000 to afford the current median home price in New York state, which is $569,500. Besides your income, your debt-to-income ratio, credit profile, down payment savings amount, mortgage rates, closing costs, and ongoing costs also play a role. It's important to calculate your monthly mortgage to gauge affordability.

Can I buy a home in New York with bad credit?

When you have bad credit, this usually means fewer mortgage options. That said, an FHA or VA loan might be a possibility if your credit score is at least 580.²

The bottom line: Start looking for your New York home

Narrowing down your dream home in New York means considering various market factors, such as the ideal location, type of home, current market conditions, and the overall home buying process in the state. It's essential to understand the potential advantages and disadvantages of relocating – or transitioning from renter to homeowner – in the Empire State.

If you're a prospective homeowner in New York, apply for a mortgage today.

¹ Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

² To qualify for this offer, you must meet all standard FHA eligibility requirements. In addition, your total mortgage payment, including taxes and insurance, cannot exceed 38% of your income, your debt-to-income (DTI) ratio cannot exceed 45%, and you must have 12 months of verifiable housing history immediately prior to your application, no late payments 30 days or greater in the last 12-months, and no derogatory marks on your credit report. Not available on jumbo loans. Asset statements may be needed, no more than 1 day of non-sufficient fund fees are allowed in the most recent 2 months prior to application. Additional restrictions/conditions may apply.