Buyers Can Look All They Want—But Many Still Can’t Buy (Especially in High-Tax States)
Every weekend, open houses fill with hopeful buyers touring properties, browsing listings online, and dreaming about homeownership. But here’s the hard truth: it doesn’t matter how many homes you tour if you can’t afford to buy one.
In high-cost states like New York, that reality hits especially hard. Yes, home prices are high—but the real obstacle isn’t just the listing price. It’s affordability, driven by mortgage rates, staggering property taxes, and the upfront cash needed to close.
The Real Cost to Buy: A New York Reality Check
In many parts of New York State, property taxes are among the highest in the country—and $16,000 per year in taxes is considered conservative for many buyers here.
Example: Buying a Median-Priced Home in New York
- Home Price: $420,000 (approximate median)
- Down Payment (5% conventional loan): $21,000
- Closing Costs (includes taxes, fees, lender costs, etc.): $10,000
- Prepaid Taxes, Insurance, Escrow (often required upfront): $10,000+ (includes prepaid property taxes, first year’s insurance, etc.)
- Total Cash Needed at Closing: Around $41,000 or more
Monthly Payment Estimate (30-Year Fixed Loan at 6.5%)
- Principal & Interest: Approx. $2,523
- Property Taxes: $1,333/month ($16,000 annually)
- Homeowners Insurance: $150/month (estimate)
- Total Monthly Payment: Around $4,000/month
First-Time Buyers Face the Toughest Road
First-time buyers feel this burden more than anyone. Unlike repeat buyers, they don’t have equity from a prior sale to cover the down payment or closing costs. Many are stuck in a cycle—paying high rent that makes it impossible to save enough to buy.
They may look at homes all day long, but they simply can’t buy if they can’t qualify for the mortgage—or if they can’t afford the hefty monthly payments once property taxes are factored in.
It's Not Just About Prices—It's About Financing Reality
Many assume today’s buyers are waiting for prices to drop. But in truth, most are waiting for financing conditions to improve—whether that means:
- Lower mortgage rates
- More affordable homes
- Down payment assistance programs
- Wage growth to catch up with housing costs
For now, they remain “watchful waiters”—actively looking, but unable to buy.
The Bottom Line
In New York and other high-cost states, buyers aren’t just battling home prices—they’re fighting mortgage rates, high property taxes, and the cash needed to close.
No matter how many homes you tour or how long you scroll through listings, you can’t buy what you can’t afford to finance.
If you’re considering buying, it’s wise to meet with a mortgage advisor early, get pre-approved, and understand all the costs involved—including those hefty property taxes. In markets like ours, that number can make or break the deal.