New York Mortgage Market Edges Toward Stability as Affordability Remains a Hurdle

Written by:

Steve Marcinuk

Date:

29 Dec 2025

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The New York residential mortgage market is showing early signs of stabilization heading into 2025. Industry professionals are reporting steadier rates and a modest increase in borrower confidence, even as high home prices and strict lending requirements continue to shape buying decisions throughout the region.

Mark Fisher, Regional Vice President at UNMB Home Loans Inc., has seen the market shift repeatedly during his 14 years in mortgage origination. Having closed more than a billion dollars in loans, Fisher offers a detailed view of the factors currently affecting both new buyers and experienced investors across New York’s varied residential landscape.

Rate Stability Brings Measured Confidence

After a prolonged period of volatility, mortgage rates in New York have become more predictable. “For the last few months, rates have been in the low to mid-six range, and it’s been a little bit boring because things haven’t really moved too much,” Fisher says. While rates remain higher than the record lows seen during the pandemic, their recent stability has encouraged more buyers to re-enter the market.

This predictability is influencing buyer psychology as much as the rates themselves. “The media has been increasingly reporting on rates being lower, and although that’s not exactly true because rates have been stable for the last few months, they have come down from the near 7% range,” Fisher explains. This perception, combined with ongoing Federal Reserve policy discussions, is giving some previously hesitant buyers the confidence to move forward.

Regional Differences Define the Market

Market activity varies widely across the New York metropolitan area. Westchester County stands out for its intense competition, with Fisher noting, “It’s still extremely competitive, with a lot of transactions still needing to waive mortgage or appraisal contingencies.” Even with average home prices around $700,000 and high property taxes, bidding wars remain common, indicating that demand is still outpacing supply in this suburban market.

In contrast, the Bronx presents a different set of dynamics, particularly in the Castle Hill neighborhood, where Fisher works extensively with the Bangladeshi community. Roughly 30% of his business comes from this area, where many clients are self-employed and rely on non-qualified mortgage (non-QM) loan products. These loans offer flexibility for borrowers who do not meet traditional income documentation standards.

First-Time Buyers Face More Than Price Hurdles

Affordability remains the primary challenge for first-time buyers, but Fisher points out that the difficulties extend beyond just high home prices. “Payment shock is one of the biggest barriers,” he says, referring to the gap between what buyers pay in rent and what they would owe for a mortgage, including taxes and insurance.

Entry costs are high. “If you’re doing a $700,000 purchase and even if you’re doing a minimum down payment of 5% plus closing costs, you’re looking at $70,000 you’re going to need to come out of pocket,” Fisher calculates. As a result, many buyers rely on family gifts or dip into retirement savings to cover the upfront costs.

Despite these obstacles, Fisher advises first-time buyers to act when their finances allow. “The market, more than likely, is not going to get cheaper than it is today. The New York City market does appreciate at a faster pace than the rest of the country, and the longer you wait, the harder it’s going to be for you to get in,” he says.

Technology Speeds Up Loan Processing

The mortgage industry is experiencing rapid technological changes that are streamlining the origination process. Fisher points to a new product his firm has adopted: “We actually have a new loan product that we’ve taken advantage of this year. It’s a no-doc HELOC program. You don’t need any physical documents to provide for the process. Instead, your income is reviewed by linking your bank accounts through Plaid.”

This approach dramatically reduces turnaround times. “I could start with someone today, and they could have $500,000 in access to their equity in a week from now,” Fisher says. These technological advances are raising questions about the future role of mortgage professionals as automation becomes increasingly central to the process.

Non-QM Loans Gain Wider Acceptance

The non-qualified mortgage market has become an established part of the lending landscape, especially for self-employed and gig economy borrowers. “Two years ago, you talked about non-QM, and a realtor thinks you’re crazy, no idea what you’re talking about. It’s more well-known nowadays,” Fisher says.

The rate difference between conventional and non-QM loans has narrowed. “You can do a loan as a business owner and provide bank statements to verify your income, and maybe only have a half percent difference in interest rate or less,” he explains. This change is significant for borrowers with non-traditional income, who previously faced much higher borrowing costs or outright rejection.

Real Estate Agents Adjust to New Pressures

Real estate agents have faced a tough year, with new compensation regulations and continued low transaction volumes. “This was another tough year for a lot of realtors,” Fisher says. “They had to deal with the new laws regarding their compensation, so for a lot of people, especially the ones that aren’t as strong with their skill set in sales, they struggled a lot more.”

Despite these challenges, Fisher has observed growing optimism among agents as rate stability slowly returns and buyers become more active.

Underwriting Standards and Increased Scrutiny

While the fundamental criteria for mortgage approval have not changed dramatically, slower market activity has given underwriters more time to review files more thoroughly. “There’s been more time for underwriters and QC departments to do more digging and investigating, and create more paperwork and conditions,” Fisher notes.

This closer scrutiny, combined with new technology, is changing how loans are processed. Borrowers may find themselves facing more documentation requests, even as digital tools speed up other parts of the process.

Cautious Optimism for 2026

Looking ahead, Fisher expects a gradual improvement in market conditions, with particular focus on the Federal Reserve’s monetary policy. “I’m very interested to see what happens when the new Fed Chair takes over, and how aggressive or non-aggressive they’re going to be in their stance on monetary policy,” he says.

Fisher predicts mortgage rates will continue to decline slowly. “Overall, mortgage rates lag in terms of the moves that we see from the Fed. So I think some catching up needs to be done. We should hopefully see some lower mortgage rates next year,” he says.

For those who have stayed active through recent market turbulence, Fisher sees opportunity. “I think with a lot less competition in the market for both real estate agents and on the mortgage end, there’s a lot of opportunity for those who have really ridden the roller coaster,” he says.

The New York residential mortgage market appears set for gradual stabilization in 2026. Rate predictability and technological improvements are supporting renewed buyer confidence, even as affordability challenges and tighter underwriting continue to limit access for many. Industry professionals who adapt to these evolving conditions may find new opportunities as the market recalibrates in the year ahead.