A number of developments were reported this week which begin to point to a slight shift in the trajectory of the real estate market nationwide.
First, for the most part, inventory continues to shrink, though in some markets it is actually increasing. In the New Jersey market, inventory continues to erode, giving less choice to buyers.
And as buyers become slower to jump into the appreciated real estate market, the median tenure for homeownership has now jumped to 10 years; this is up by 10% from the prior year.
The number one reason for a slower market has to do with the rising interest rates that banks are charging buyers to mortgage their homes.
Also, the new construction rate still is not meeting demand with labor shortages and higher material costs.
In many markets across the country, houses have recovered most of what they lost in the Great Recession of 2008 but still there are numbers of towns and communities that have yet to recover.
But this September there was a shift in one important market metric: foreclosures.
Black Knight reported that mortgage delinquencies had spiked, bringing September’s delinquency rate to the highest level in a decade.
According to the report, mortgage delinquencies increased by 13.2% in September, which represents the highest monthly increase since November 2008. Currently, according to Black Knight, the U.S. delinquency rate is 3.97%.
Historically, September normally brings an increase in mortgage delinquencies. Since 1999 over 80% of Septembers reflected an increase in mortgage delinquencies.
The other factor that is working itself into the numbers is the impact of Hurricane Florence. We have yet to see the impact of Hurricane Michael, but according to metrics, the eastern area of the United States hit by Hurricane Florence showed a spike of 38% month-over-month in delinquencies. It also indicated that more than 6,000 borrowers missed a payment as a direct result of the storm.
One factor that was atypical was that of foreclosure starts, which fell by 15.1% from August to September, representing an 18-year low. The number of foreclosure starts nationwide, according to the report issued by Black Knight, was 40,000 for the month of September.
Another metric pointing to a cooling-off period was discovered in the report issued by Lending Tree, which indicates that the average home payment on a U.S. home fell in the third quarter of 2018. The report found that the average down payment decreased by nearly 10% in the third quarter falling, from $52,480 to $47,265.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.