Buying a Home in New Jersey in 2018: A Sense of Urgency?
Should I buy a home in New Jersey now, in 2018, or wait until 2019? What will market conditions be like if I postpone my purchase until later this year? What are home prices and mortgage rates expected to do over the coming months?
These are common questions among New Jersey home buyers considering a purchase in 2018. While no one can predict future housing and economic conditions with total accuracy, there have been some recent trends that might create a sense of urgency among buyers.
Mortgage rates have risen in recent weeks, and home prices across New Jersey continue to inch upward. These trends make a case for buying a home sooner rather than later, at least from a cost perspective. Here’s what you need to know about them.
Buying in New Jersey: 2018 vs. 2019
According to the latest data from Zillow, the median home value for the state of New Jersey rose by 4% over the last 12 months (as reported in February 2018). The statewide median house value had reached $311,600 by the start of 2018. Prices are higher in some parts of the state, including those that fall within the NYC metro area.
The point is that prices are higher now, at the start of 2018, than they were last year. And they are expected to continue rising over the coming months. Zillow’s economists recently predicted that the median home value in New Jersey would rise by around 2.6% over the next 12 months, stretching into 2019.
But getting back to the question at hand: Should I buy a house in New Jersey now, in 2018, or wait until 2019?
House value appreciation has slowed down in many cities across the country, following several years of above-average growth. Still, the general consensus among analysts is that house prices in New Jersey and nationwide will continue to climb throughout 2018. This means that buyers who postpone their purchases until later in the year, or in 2019, could encounter higher housing costs.
Mortgage Rates Rose Going Into 2018
Most home buyers in New Jersey use mortgage loans to help finance their purchases. So mortgage rates are another important trend to watch. And, like home prices, they’ve been rising lately.
According to the weekly industry forecast conducted by Freddie Mac, mortgage rates recently rose to their highest level since December 2016. This is another trend that could create a sense of urgency among home buyers in New Jersey and across the nation.
During the week of February 8, 2018, the average rate for a 30-year fixed home loan rose to 4.32%. That was the highest average since December of 2016. (The “standard” 30-year mortgage is the most popular home loan product. Rates rose in other mortgage categories as well, including the 15-year fixed and the 5-year ARM loan.)
According to the February 8 report:
“The U.S. weekly average 30-year fixed mortgage rate rocketed up 10 basis points to 4.32 percent this week. Following a turbulent Monday, financial markets settled down with the 10-year Treasury yield resuming its upward march. Mortgage rates have followed. The 30-year fixed mortgage rate is up 33 basis points since the start of the year.”
Average mortgage rates have risen steadily since the first week of 2018, after a long period of hovering below 4%. This trend coincides with forecasts issued by analysts back in 2017. Last year, economists from both the Mortgage Bankers Association and Freddie Mac were forecasting that rates would rise gradually throughout 2018.
The bottom line to all of this is that housing costs have risen over the last few years, and this trend could continue through 2018 and into 2019. So for those planning to buy a home in New Jersey this year, a sense of urgency might be warranted.
Disclaimers: This article includes housing market trends and predictions reported by third parties not associated with our company. We have included them here as an educational service to our readers. Mortgage rates can vary from one borrower to the next due to a number of factors, including credit history and the type of loan being used.