The year-end numbers for the housing market are looking quite strong. Despite the recent jump in mortgage rates since the election, the annual average for the 30-year fixed-rate mortgage was 3.65 percent in 2016, the lowest annual average ever recorded in the Freddie Mac PMMS going back to 1971. According to the Freddie Mac Primary Mortgage Market Survey® (PMMS®), rates for a 30-year-fixed mortgage and a 15 year fixed mortgage are only slightly up from this time last year- which means they are still dramatically lower than the rates in 2008 and 2009.
In November, sales of new homes hit their second highest peak since 2008, according to data released by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD). While these numbers have been fickle month-to-month, this is a hopeful sign of a surge in demand for the new year to come.
November's new single-family house numbers came in at a seasonally adjusted annual rate of 592,000. This number is 5.2 percent above the October rate, and 16.5 percent above November 2015's numbers, which landed at an estimated 508,000.
"Healthy local job markets amidst tight supply means many areas will remain competitive with prices on the rise," says Lawrence Yun, NAR chief economist. "Those rushing to lock in a rate before they advance even higher will probably have few listings to choose from. Some buyers will have to expand the area of their home search or be forced to delay in order to save a little more money for their down payment."
According to the Monthly Indicator Report from New Jersey Realtors, regarding residential sales-
• Single Family Closed Sales were up 29.7 percent to 6,050.
• Townhouse-Condo Closed Sales were up 18.4 percent to 1,721.
• Adult Communities Closed Sales were up 20.7 percent to 588.
The Northeast saw the most pending home sales activity in November, with the PHSI up 0.6 percent to 97.5—now 5.7 percent above one year ago. Homes in New Jersey are selling faster making the market a bit more competitive. It is key for prospective buyers to remember that their greatest aid in this situation could be a pre-approval by a reputable lender who can insure high investor and seller confidence. A strong credit score paired with a pre-approval from a known lender will enable a buyer to be competitive in their offer and also have a strong handle on their affordability limits.
Housing's collective value grew to $29.6 trillion this year, a record-high reflecting 5.7 percent appreciation—an additional $1.6 trillion—in 2016.