Freddie Mac reported this week that the average mortgage rate for a 30-year and 15-year fixed mortgage fell to all-time lows.
The 30-year fixed-rate average fell to 2.86%; this broke the prior low of 2.88% in the first week of August.
The 15-year-fixed-rate rate mortgage also set a new historic low, falling to an average of 2.42%.
In spite of high buyer demand, the mortgage rates continue to fall, creating an additional financial incentive for buyers looking to jump into the red-hot real estate market despite record low inventory.
There is concern that such low rates are creating a reverse bubble within the market that cannot be sustained.
New Jersey Real Estate
According to New Jersey Realtors, June single-family pending home sales skyrocketed by nearly 39%, from roughly 8,000 to over 11,000.
This was accomplished with inventory levels at nearly 50% lower than they had been in 2019. Homes for sale in the month of June, according to New Jersey Realtors, came in at 23,514; this compares to 42,590 homes available for sale in 2019.
The month supply of inventory also fell dramatically from 6.2 month supply to 3.4 month supply.
July pending home sales showed no let-up, where pending sales for single families jumped by 48% from 7,948 to 11,763. In addition, new listings also increased by 10% for the same period.
Inventory levels in July fell dramatically to 3.2 month supply versus a 6 month supply in 2019. This represents a 46.7% drop from 2019 for the number of homes for sale at the end of July, which came in at only 22,440.
Another important metric when analyzing the strength of a market is the percentage of list price received. In July 2020 sellers received 98.8% of the list price. In July of 2012, sellers received 94.9% of the list price with 12.9 month supply of houses for single-families.
With the high unemployment for the state of New Jersey and unsustainable low interest rates being made available for homes, concern does come in that we are creating a market that is inflated by non-realistic interest rates.
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.
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