January Mortgage Newsletter

January Mortgage Newsletter

Rates Are Down!
Mortgage rates have dropped to the lowest level in nearly a year. This was unexpected by most Mortgage Professionals including myself. Unfortunately, this pleasant surprise has not boosted Mortgage Applications. In fact, even after seasonal adjustments, mortgage applications are down nearly 10%. This will certainly have a positive impact on the duration of time for processing, underwriting and closing of new mortgage applications.

“Investors continued to show a preference for safer U.S. Treasuries, as concerns over U.S. and global economic growth, along with uncertainty over the current government shutdown, drove rates lower," according to Joel Kan, Mortgage Banker Association’s Associate Vice President. Many economists had previously predicted 2 rate increases this year by the Fed. Now this is changing and there are some that are suggesting that the Feds should decrease rates this year.

Our 30 year fixed rate is down .375 from last month and I can’t remember the last time we had such a sharp decrease in rates. Please note, not too long ago the rates were approaching 5%. Here are our current rates:

Conventional 30 Year Fixed 4.125% APR

Conventional 15 Year Fixed 3.375% APR

FHA 30 Year Fixed 3.375%

10 Year ARM 3.75%

7 Year ARM 3.625%

The U.S. economy is doing well and it continues to fuel new listings and home sales across most of the country. As I have been mentioning for many months, affordability is worrisome. Compared to past years, housing is still relatively affordable. Freddie Mac recently stated prior to the recent decline in rates, the 30-year fixed rate was at its highest level in nearly a decade, reaching 4.94 percent, average rates were 10.39% 30 years ago, 6.78 percent 20 years ago and 5.9% 10 years ago. Affordability fear is causing a slowdown in home price growth in some markets.

The national unemployment rate was recently reported to be at 3.7 percent. During the past several years of economic growth, low unemployment rates have helped the housing market. Builders are starting to show caution by delaying the start of new construction projects.

Attention investors! Real Estate is a wonderful alternative to investing in the stock market. We have excellent programs for investors with as little as 20% downpayment. Lacking a downpayment? Call me and we can discuss creative ways for funding downpayment.

The New Jersey Association of Realtors released its report for Real Estate activity in the state of New Jersey for the Month of November. Here are some year to date (YTD) numbers:
New Jersey YTD 2017 YTD 2018 % Change
New Listings 171,418 173,807 +1.4%
Pending Sales 109,890 110,045 +0.1%
Closed Sales 107,178 106,980 -0.2%
Median Sales Price $280,000 $292,000 +4.3%
Average Sales Price $359,052 $370,129 +3.1%
Days on Market 71 64 -9.9%
Affordability Index 155 140 -9.7%
This is still a very stable and healthy market. A win-win for both buyers and sellers.

Vibha Singh

CEO

732-648-1748

NMLS ID 66034

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