Keane Duncan, leader of Ryedale District Council, said the River Derwent in Malton was approaching 5m and still rising.
The flooding has caused several road closures in the area with Castlegate, Norton Road (Blackboards), Church Street and County Bridge all shut.
Mr Duncan told the BBC: "A lot of residents are saying to me that the situation is looking worse than in 2015/16 when we had problems most recently.
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"The situation is really of grave concern for residents here. We get to 5m that's when we have the difficulties.
"We will have a prolonged period when we are at peak levels, so clearly we could be with the situation for several days."
The Environment Agency said it expected the Derwent to peak at about midnight last night.
Mr Duncan said the town's defences have held up in recent years, but there were issues outside the defences.
The council said it has 16 pumps in action in Malton, Old Malton and Norton and that water levels were not expected to change overnight yesterday.
Mr Duncan added: "We have got pumps here and extra pumps are on the way. I am hopeful and confident we can keep as much of that water away from homes, businesses and people as we can."
He implored residents to not ignore road closure signs and asks everyone to respect them, as they are there for safety reasons.
Two flood warnings remain in force for Old Malton and Mill Beck at Welham Road, Norton where flooding is expected.
As of 9am this morning, a spokesperson for the Environment Agency said: "This flood warning remains in force due to high groundwater and river levels. River levels will remain high through the weekend. The current level of the River Derwent at Malton is 5.24m and is still slowly rising. The level on the River Rye at Howe Bridge is 5.05m and has now peaked.
"Areas most at risk are properties in Old Malton. Pumps are continuing to operate in the area to manage groundwater and surface water. The weather is forecast to remain unsettled with wintry showers for the next couple of days."
The latest flood warning updates from the Environment Agency are available HERE.
Fire crews were called throughout the day yesterday to Malton and Pickering to assist with flooding.
At 9.30am crews rescued two adults, two children, two dogs and a cat from the property using a triple extension ladder in Buttercrambe due to flooding affecting the ground floor.
Firefighters helped the council set up pumps at Castlegate and Church Street in Norton.
Crews were called to Pickering flood waters outside of a property, they gave advice and helped place sandbags. Crews were also called to Railway Street in Malton to reports of floodwater entering properties and gave advice to residents.
A crew attended flooding to a basement of a property in Sheepfoot Hill, Malton, and used a light portable pump.