December Mortgage Newsletter

December Mortgage Newsletter

Rates Stable
The Fed will be meeting this month and consensus is that there will be an increase of .25% to the Discount rate. This will have a direct impact on the prime rate. Commercial loan borrowers that have rates indexed to prime will see an increase in payment. Many home equity loans are also pegged to prime and those rates will also adjust upward. Some economists are suggesting that there is no need to continue with the quarterly Fed rate increases.

The past few weeks have been good for Mortgage rates. The 10 Year Treasury Note yield is a good indicator for mortgage rates and the 10 Year note yield receded to below 3% for the first time in a long time. In fact, the 10 Year note yield had exceeded 3.25% recently. A decrease of .25% is very significant. Lower rates will have a positive effect on affordability. The affordability was going in the wrong direction so its nice to see that number turning around as we head into the final month of the year. Perhaps this will give positive momentum for the upcoming spring market.

The stock market had a setback in October and fortunately this did not translate to a negative for the Real Estate market. Unemployment has been under 4% for the last 3 months and for 4 of the last 5 months. This is good for all industries including those associated with Real Estate. Homebuilder confidence continues to be stable and that is important for new housing starts.

All our rates our down .125% from last month. Here are our rates:

Conventional 30 Year Fixed 4.5% APR

Conventional 15 Year Fixed 3.875% APR

FHA 30 Year Fixed 4.0%

10 Year ARM 4.125%

7 Year ARM 4.0%

The New Jersey Association of Realtors released its report for Real Estate activity in the state of New Jersey for the Month of October. Here are some year to date (YTD)

New Jersey YTD 2017 YTD 2018 % Change
New Listings 160,134 160,612 +1.5%
Pending Sales 101,581 101,983 +0.4%
Closed Sales 97,954 97,804 -0.2%
Median Sales Price $280,000 $292,000 +4.3%
Average Sales Price $359,845 $370,044 +2.8%
Days on Market 71 64 -9.9%
Affordability Index 154 140 -10.3%
The affordability number continues to stick out. Year to date through September, the Index was at 140. That number has stabilized and perhaps it will get better due to modestly lower mortgage rates.

Happy Holidays!

Vibha Singh



NMLS ID 66034

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