Affordability
There aren’t many major shifts or changes currently in the real estate market in June of 2024. Supply has increased in some cases double digits but that is still below the 2019 levels. It all comes down right now to affordability. Because of inflation, taxes, and high interest rates compounded with home prices increasing by nearly 60% over the last 4 years, access to the real estate market is severely limited.
Freddie Mac reported that the 30-year fixed rate mortgage averaged 6.99 this current week. Just because it broke the 7% level it’s still not much of a decline from the 7.03% for the week before.
But it’s not just the interest rates, as we mentioned, it’s inflation that is making this an increasingly contentious market to navigate, especially for first-time home buyers who are dealing with record high rents. But in retrospect, the Fed’s decision to hold off on reducing rates may no longer be the case in the short term. Canada’s decision to cut its rates in the first week of June was the first time it had done so in 4 years, and also reflected the first time a G7 nation has cut rates over the last 4 years. And now the European Central Bank also took action on June 6th, cutting its interest rate for the first time since 2019.
As reported by ATTOM, even though inventories increased and sales throughout the Northeast also increased, lending activity in the first quarter of 2024 has been down from its peak in 2021 and is at its lowest level in nearly a quarter of a century. The Mortgage Bankers Association also reported that applications were down by 5.2% at the end of May.
Affordability, high rates and inflation obviously have taken their toll as pending sales in April hit another 4-year low, according to the National Association of Realtors. Some of the areas that took the biggest price hits were the ones that increased the most during the boom time, including Austin, San Antonio and Fort Worth, Texas
Buying a home right now is super expensive, but so is renting an apartment. The average rent in the state of New Jersey right now is $2,500 a month.
There is increased softness being felt throughout the New Jersey market, but time will tell as to whether this is a lull or the beginning of a significant downturn in the cost of a home.
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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