Nationally Freddie Mac reported that mortgage rates have stayed below 3% for 11 consecutive weeks. This has clearly had an impact on the robust housing market. The average US mortgage for a 30-year fixed loan fell one basis point to 2.87% this past week.
The fixed rate for a 15-year mortgage was even lower at 2.37%, but this rose one basis point from the prior week.
These historically low interest rates are clearly incentivizing first-time buyers to dip their toe into the market.
Two types of buying are taking place: buying in regions that are more affordable within the nation, such as the Midwest, and homes that are adjacent to high-population cities that are centers for the pandemic, such as New York City.
Adjacent counties in New Jersey, such as Essex and Union, have seen robust buying activity, which in many cases has resulted in actual bidding wars.
The National Association of Realtors reported last month that the sales of existing homes is on track to break an all-time high of six million sales for the year based upon the pace of August’s numbers. Anecdotal reports from real estate agents throughout the state indicate that the trajectory and momentum are not letting up. We are clearly expecting to see September existing home sales to be just as strong.
The lower interest rates, in addition to incentivizing home purchases, are also having the effect of increasing the median price for a home. The median existing home price in August nationally was $310,600, which represents an 11.4% increase from prices reported in August of 2019.
In addition, the price surge is being fueled by the historic low inventory available. The low number of homes for sale is creating a clear seller’s market, making home buying a very competitive space.
The National Association of Realtors reported that the number of homes on the market at the end of August came in at 1.5 million homes, which is down 18.6% from 2019. But in New Jersey inventory has plunged by double digits, many times up to 30% to 40% less that 2019.And the months supply of inventory has now falled from 5 months for most of New Jersey to under three months in most cases.
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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