2025 Mortgage Rates: What First-Time Buyers in NY Should Expect

As of April 2025, first-time homebuyers in New York are facing a tough housing market shaped by high mortgage rates and ongoing affordability challenges. The average 30-year fixed mortgage rate in the state is currently around 6.5% to 6.7%—a bit lower than the national average but still a significant barrier for many trying to enter the market. For those exploring a 15-year fixed loan, rates sit near 6.0%, while adjustable-rate mortgages (ARMs) are closer to 7.4%, depending on the lender and the borrower's credit profile.

These higher rates are cutting into what buyers can afford. Take a $500,000 home with a 10% down payment: at a 6.5% interest rate, the monthly mortgage payment comes out to about $2,846 (before taxes and insurance). That’s a steep jump from just a few years ago, when rates hovered around 3%. On top of that, the median home price in New York has now surpassed $530,000, making it even tougher for first-time buyers to find something within reach.

The broader economic landscape isn’t offering much relief either. Inflation remains a concern, and while the Federal Reserve has paused interest rate hikes for now, there’s no clear sign that significant cuts are coming soon. As a result, mortgage rates remain high, and lenders continue to price in risk. In fact, national home sales in March 2025 dropped to their lowest level since 2009, according to data from the National Association of Realtors—a clear sign that many buyers are holding back.

That said, New York is doing slightly better than some other states when it comes to mortgage rates, thanks in part to competition among local lenders and strong demand in both urban and suburban areas. First-time buyers also have access to resources like the State of New York Mortgage Agency (SONYMA), which offers low-interest loans and down payment assistance for eligible applicants.

In this kind of market, being prepared is key. Prospective buyers should shop around for the best mortgage rates, work on boosting their credit scores, and take advantage of every assistance program they qualify for. Locking in a rate now, with plans to refinance later, could be a smart move—especially if home values continue to rise. The path to homeownership may be more complicated today, but it’s still within reach for those who plan ahead.

The mission of the Urban Builders Coalition continues to support equal and affordable housing for all and remains committed to raising awareness and contributing to initiatives that help make that goal a reality.