Weekly Real Estate Monitor for Mar. 18-22

This week the focus was on the Federal Reserve's announcement and while media headlines highlighted the Fed maintaining rates, the bond market was the primary concern as it influences mortgage rates in allowing them to fluctuate despite the Fed's decision. Market attention was on the Fed's future rate cut forecasts, which reaffirmed the expectation of three rate cuts by year-end, albeit with a slight adjustment from the previous projections in December.

Mortgage Rates Decrease Below 7% After Fed Announcement

The decrease in rates was moderate, with the average mortgage lender still functioning at significantly elevated levels compared to the beginning of the previous week. However, rates have dropped to 7.03% from 7.11% following the announcement, further declining to 6.96% yesterday and reaching 6.91% today. Lenders typically anticipate and incorporate the Federal Reserve's decisions before their meetings, suggesting that market fluctuations could be a response to the anticipated rate hike prior to the Federal Reserve meeting.

New Flood History Disclosures Mandatory Starting March 20th

As flood risks continue to grow in the state, New Jersey has now mandated new flood history disclosure requirements for all sellers and landlords as of Wednesday. Beginning March 20, all sellers and certain landlords must use the new flood history disclosure forms including new questions on the seller's property condition disclosure statement and a new rental flood risk notice. The New Jersey contract of sale, lease, and seller's property condition disclosure statement have now been updated and goes into effect on any future home listings or sales.

Flood risks in New Jersey are growing due to the effects of climate change. Coastal and inland areas may experience significant flooding now and in the near future, including in places that were not previously known to flood.  For example, by 2050, it is likely that sea-level rise will meet or exceed 2.1 feet above 2000 levels, placing over 40,000 New Jersey properties at risk of permanent coastal flooding.

Additionally, precipitation intensity in New Jersey is increasing at levels significantly above historic trends, placing inland properties at greater risk of flash flooding. These and other coastal and inland flood risks are expected to increase within the life of a typical mortgage originated in or after 2020.

Weekly Highlights:

New listings continue gain over last year.

There was an 8.0% of listings increase compared to the same period in 2023, further widening the gap from last year's figures.

Median list price hits a new record high.

The median sales price reflected a 5.0% increase from the previous year and a 1.2% rise from the prior week. This marks the second out of three recent weeks to set a new record in median list price, and the upcoming Spring demand may further drive prices upward.

New contracts similar to last year.

Contracts decreased by 1.2% compared to the previous year. Despite this decline, the year-over-year difference has further reduced from the prior week. Although the contract numbers are almost equal to last year's, there has been a decrease in showings compared to the corresponding period last year as there are less homes on the market.

Daily Rate Index