Are you thinking of buying your first home in New Jersey in 2018? If so, keep reading. Below, we have rounded up the latest mortgage industry and housing market news that’s relevant to home buyers.
5 Things to Know When Buying a First Home in New Jersey
Home prices across the state are still rising, and additional gains are expected in 2018. Interest rates might trend upward over the coming months as well. Inventory remains tight in some NJ housing markets. These are just a few of the trends you should know, when buying your first home in New Jersey in 2018.
1. Home prices are still rising, and will likely continue in 2018.
On average, house values across the state of New Jersey have risen steadily over the last couple of years. And the latest round of predictions from economists suggest they will continue to rise into 2018 as well. This is the first thing you should know about buying a home in New Jersey in 2018.
According to the real estate information company Zillow, the median house value for NJ reached $308,300 in October 2017. That was a 5% increase over the same month a year earlier. Looking forward, the company’s economists expect prices to continue rising through the end of 2017 and into 2018 (though they could slow down a bit).
2. Housing market inventory declined during 2017.
While housing markets across New Jersey are not as tight as they are in places like California and the Pacific Northwest, there is still limited inventory relative to demand. And this is relevant to anyone buying their first home in 2018.
According to New Jersey REALTORS®, the state’s professional Realtor organization, the number of homes for sale declined by around 20% from August 2016 to August 2017.
In a recent housing market update, the group stated:
“Recent manufacturing data is showing demand for housing construction materials and supplies, which may help lift the ongoing low inventory situation in 2018.”
But inventory levels vary widely from one market to the next. Some towns and cities across the state have more supply than others. The supply of homes for sale appears to be tightest in the Camden area, according to the latest housing data. Other markets are more balanced.
This is an important trend to research ahead of time, before entering the housing market. It also underscores the importance of having help from an experienced real estate agent.
3. The mortgage industry has become more flexible.
Earlier this year, Fannie Mae announced that it would allow higher debt-to-income ratios for borrowers seeking a home loan. (Fannie Mae is one of the two government-sponsored enterprises that purchase loans from lenders through the secondary market.) This was the latest step in an ongoing “loosening” of the mortgage industry.
Mortgage credit standards have eased over the last few years, and this could affect those who are planning to buy their first home in New Jersey in 2018. Please contact us if you have questions about qualifying for a loan.
4. Mortgage rates are expected to rise in 2018.
A recent set of forecasts from Freddie Mac and the Mortgage Bankers Association suggest that rates could rise gradually between now and this time next year. The MBA, for example, expects the average rate for a 30-year home loan to rise to 4.5% by the first quarter of 2018.
Granted, these are just forecasts. They are the equivalent of an educated guess. But the general consensus among housing analysts is that interest rates and home prices will rise over the coming months. So those buying their first home in New Jersey in 2018 could encounter higher housing costs.
5. We can help you prepare for your New Jersey home purchase.
NJ Lenders Corp. can assist you in several ways. We can pre-approve you for a home loan before you start shopping for house. This could help you narrow your home search to the kinds of properties you can afford, based on your financing. It could also make sellers more inclined to accept your offer, since you’ve been pre-screened by lender.
We can also answer any questions you have about qualifying for a mortgage loan in New Jersey. Please contact our knowledgeable staff to get started!