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Weekly Real Estate Monitor for Feb. 26 - Mar. 1

This week, mortgage interest rates trended downward slightly but still continue to be above 7%, starting the week at 7.13% and at 7.08% as of today. Although still lower than the rates observed in the fall of 2023, this development dampens enthusiasm among buyers looking to enter the spring market. It is noteworthy that this housing market is distinctive, with 32% of buyers opting for all-cash purchases, possibly influenced by substantial gains in housing equity. If this trend continues, it may create disadvantages for first-time buyers, who are typically more sensitive to prices, as the increase in mortgage rates could potentially price them out of the market. Existing-home sales in January 2024 bounced back to reach 4 million The National Association of Realtors (NAR) published a report on existing-home sales data, revealing that housing market activity in January surged by 3.1% compared to December 2023. January's existing-home sales achieved a seasonally adjusted annual rate of 4 million, marking a 1.7% decline from January 2023. By the end of January, unsold listings increased by 2.0% from the previous month, totaling 1,010,000 homes for sale. Inventory levels were up by 3.1% compared to January 2023, with it taking approximately 3 months to clear the current inventory at the current sales pace. Homes took around 36 days to go from listing to contract in the current market, slightly longer than the 33 days it took a year ago. All-cash buyers has reached its highest level since 2014, accounting for 32% of all buyer While mortgage interest rates have increased from their historic lows in recent years, the number of all-cash home buyers has notably increased in recent months. Since October 2022, buyers who purchased their homes without financing, have accounted for over a quarter of the real estate market. As of January 2024, all-cash buyers now represent 32% of home sales, marking the highest level since June 2014. These home buyers primarily consist of vacation buyers and investors based on data from the REALTORS® Confidence Index over the last six months. However, primary residence buyers are also actively engaging in all-cash purchases. For primary residence buyers, all-cash transactions or larger than 20% down payments have seen a rise over the past two years. These buyers typically sold their previous homes and used the proceeds to purchase their next property without a mortgage or borrowing a smaller amount. This ability to make cash purchases is often attributed to the substantial housing equity they have accumulated as property values have surged in recent years. In 2003, only 10% of repeat primary residence buyers could afford an all-cash purchase, compared to 26% in 2023. This trend is less common among first-time buyers, although there was a slight increase from 4% in 2003 to 6% in 2023. Apart from housing equity, another factor enabling primary residence buyers to make all-cash purchases is their tendency to relocate over long distances. All-cash primary residence buyers typically move a median distance of 60 miles, with nearly a third relocating 500 miles or more. In contrast, among those who financed their home purchases, only 16% moved over 500 miles, with a median distance of just 18 miles. Long-distance moves have remained prevalent, especially among retirees and individuals with remote work flexibility. With home prices projected to continue rising in 2024 due to limited inventory and high demand, all-cash buyers are expected to remain prominent in the market as homeowners accumulate more housing equity. In January, the average home received 2.7 offers, indicating a competitive market where all-cash buyers may have an advantage in bidding wars over those relying on financing. Weekly Highlights: New listings have increased for the fourth consecutive week. The week ending on February 25, there was a rise of 6.9% in new listings compared to the same period last year. The median time to contract interrupts the declining pattern. This marks the fourth week in a row where new listings have surpassed the previous year's numbers, indicating a positive trend in inventory growth.The decline in the median time to contract has been interrupted. Homes are now taking one day longer to sell compared to the previous week, breaking a six-week downward trend. The median list price in falls. Despite this change, the current median time to contract is still two days quicker than it was at the same time last year. In comparison to the previous year, there was a 2.5% decrease in the median list price from the preceding week. Nonetheless, the median list price remains higher than last year, with a 5.3% increase observed across the region.
Steven Holl Architects designs asymmetric Princeton institute building with curved ceilings

American studio Steven Holl Architects has completed Rubenstein Commons, a building composed of "bulbous space curves", for the Institute of Advanced Study in Princeton, New Jersey. Rubenstein Commons was designed to be a meeting place and office complex for visiting scholars to the institute, where scientist Albert Einstein once held a faculty position.The studio created an interconnected series of asymmetrical volumes, punctuated by expansive planes of prismatic glass, to give the building a layout that would encourage interaction.Steven Holl Architects designed the building for the Institute of Advanced Study in New Jersey"The idea of a commons is a place of unpredictable interaction," Steven Holl Architects founder Steven Holl told Dezeen. "And that's why the building is so fluid.""You can enter our building from either the north or the south so it doesn't have one front door. It's like a passage," Holl continued.Rubenstein Commons has three levels – spread unevenly – so that different parts of the building have one-, two- and three storeys, with the total floor space totalling 17,175 square feet (1,596 metres).The structure is made with pre-cast concreteWith a roughly L-shaped footprint, the structure's envelope was constructed with precast concrete panels.At certain positions within the design, the concrete wall panels were clad with black slate to form functional blackboards for interior use.Holl – who was in dialogue with many researchers at the institute when developing the design – said that the blackboards were an important inclusion for many of the scholars involved with the institute.Prismatic glass was used to accentuate the exteriors"I think it's a reassessment of what physical experience is," he said. "And that's also what this building is about, by the way."Many of the buildings on the campus have copper roofing, and that element was retained for Rubenstein Commons. The roof panels extend over the precast-concrete walls with a variety of shapes and inclines, punctuated by three sections of green roofing. Read: Steven Holl shapes Winter Visual Arts Building around 200-year-old trees The asymmetric shapes and elevations of the roofing allow for the interior spaces to feel lofty. The ceilings and the walls of the structure have been curved in a way that represents the "thought bubbles" of the scholars who will work there, according to Holl.The architect described the ceilings as "bulbous space curves."The curving forms also take advantage of the large prismatic glass windows, which frame the exterior landscape, optimised via a selection of greenery to represent the different times of the year, adding to the fluidity of the structure."The institute is about the intertwining of all the arts and sciences and also the phenomena of nature," said Holl. The building has double-height gathering roomsInside, wood and terrazzo flooring were used for a series of double-height cafe areas, galleries and meeting rooms, which are punctuated by smaller office and administrative spaces.In the double-height spaces, cut-outs in the roof and walls open up the structure internally, bringing in light and creating apertures from the hallways on the upper levels.The domed ceilings were meant to represent the "thought bubbles" of the scholarsAccording to Holl, these material concerns were of the utmost importance to the execution of the project."I always say that there can be ideas that drive the design, but the important thing is the experience," he told Dezeen."You need to feel the experience in the space, but if you care to look for them, there are deeper ideas that drive the designs, and I do that with all my work."The building is heated by 20 geothermal wells on the site which regulate the temperature of the structure, while operable windows help keep it cool.Other buildings on academic campuses in the US include Diller Scofidio + Renfro's layered structure for Columbia in Manhattan and SOM's renovation of a building for Wellesley,The photography is by Paul Warchol.The post Steven Holl Architects designs asymmetric Princeton institute building with curved ceilings appeared first on Dezeen.
Weekly Real Estate Monitor for April 29 - May 3

A red-hot economy tends to push interest rates upward, so any signs of cooling in the labor market could suggest a plateauing of mortgage rates for the current week, followed by more sustained declines throughout the rest of the year. In April, the economy saw an addition of 175,000 net new payroll jobs, marking one of the slower monthly job gains since the economy's reopening after the COVID-induced lockdown. Concurrently, the unemployment rate edged up to 3.9%. While the Federal Reserve is exercising caution regarding inflation and delaying rate adjustments, it's likely that 6 to 8 rounds of rate cuts by the end of 2025 could bring interest rates down to levels reminiscent of those pre-COVID. However, significant declines in mortgage rates shouldn't be anticipated due to the substantial federal budget deficit and heavy government borrowing will reduce the funds available for mortgage lending. Despite home sales hovering near 30-year lows last year and maintaining a similar pace in the first quarter of this year, the current population includes 40 million more jobs and 70 million more residents compared to previous years. This implies a substantial pent-up demand from buyers for housing entering the market in the years ahead. High Rates Don't Seem to Have an Impact on Lowering Home Prices Home price increases saw a continued acceleration since February, even as interest rates climbed. Both the S&P CoreLogic Case-Shiller Indices and the Housing Market Index (HMI) by the Federal Housing Finance Agency (FHFA) revealed annual price growth in the 7% range. The Case-Shiller U.S. National Home Price Index, encompassing all nine U.S. census divisions, reported a non-seasonally adjusted 6.4% annual gain in February, up from a 6.0% rise in the previous month. The FHFA HMI mirrored this movement, rising 1.2% in February, following a 1.0% increase in January, with an annual gain of 7.0%. Dr. Anju Vajja, Deputy Director for FHFA’s Division of Research and Statistics, noted, “U.S. house prices rebounded with an increase in February," observing double-digit growth in some areas. The Case-Shiller Indices track matched price pairs for thousands of individual houses, with each index, benchmarked in January 2000 at 100. The current values stand at 312.18 for the National Index and 336.00 and 319.95 for the 10- and 20-City Composites, respectively. FHFA’s HPI, based on home sales financed by Fannie Mae or Freddie Mac, was benchmarked at 100 in January 1991 and currently stands at 423.0 Adjustable Rate Mortgage (ARM) Loans Increasing as Buyers Seek Affordability Increasing interest rates continue to limit mortgage borrowing, as indicated by the Mortgage Bankers Association. Their Market Composite Index, which measures loan application volume, decreased by 2.3% on a seasonally adjusted basis compared to the previous week. Mike Fratantoni, MBA’s SVP and Chief Economist, commented on the situation, stating, “Inflation remains persistently high, leading markets to anticipate prolonged higher rates, including mortgage rates. This presents a challenge for the housing and mortgage markets, with the 30-year fixed mortgage rate reaching 7.29% last week, the highest level since November 2023. Both purchase and refinance application volumes declined over the week and continue to fall below last year's pace. Notably, the ARM share has reached its highest level for the year at 7.8%. Prospective homebuyers are seeking ways to enhance affordability, and opting for an ARM is one method, given that ARM rates are in the mid-6 percent range for loans with an initial fixed period of 5 years." Weekly Highlights: Listing prices hit a new record high. Listing prices are maintaining a steady climb above last year's figures. The median listed price marked a 7.3% increase compared to the corresponding week last year. The number of sellers adjusting their asking prices if they don't receive prompt offers increases. For the fourth consecutive week, the percentage of active listings with price reductions has exceeded last year's levels. In the week ending April 28, 8.0% of active listings experienced a price decrease, marking an increase of 0.8 percentage points compared to last year. New contracts below 2023 numbers. Apart from the Easter week, the new weekly contract activity in 2024 has consistently fallen behind 2023. In the week ending April 28, there was a 1.9% decrease in new pending contracts compared to the corresponding week last year. High list prices and elevated mortgage rates could be deterring buyers from engaging actively in the market. Daily Rate Index
Weekly Real Estate Monitor for April 22-26

Due to last week's economic updates, this week's economic update mortgage applications have declined, with interest rates starting the week at 7.43% and at 7.52% as of yesterday. However, even with rates in the 7.5% range, pending home sales have increased, GDP growth has fallen below expectations, and personal consumption expenditure has risen. For spring homebuyers, it suggests that the expected significant downward shifts in mortgage interest rates are unlikely in the short term, as well as shows that buyers are still out and competing for homes, making low inventory a consistent obstacle. It also brings truth to the reality of any home purchase or sale, which underlines the fact that home buyers move when life changes happen and not solely based on rate or home price fluctuations. Spring New Home Sales Resilient Despite Higher Rates In February, existing home sales saw robust growth while new home sales experienced a slight decline. However, the trend reversed in March. The U.S. Census Bureau and the Department of Housing and Urban Development reported that newly constructed homes sold at a seasonally adjusted annual rate of 693,000 in March, up from 668,000 in February. Meanwhile, the National Association of Realtors® (NAR) noted a decrease in existing home sales from 4.38 million units in February to 4.19 million in March. NAR Chief Economist Lawrence Yun attributed the stagnant home sales to the lack of significant movements in interest rates. He noted that despite rebounding from cyclical lows, there are still more aspiring homebuyers in the market given the nearly six million more jobs compared to pre-COVID highs. Affordability of Housing Declines in February 2024 The National Association of Realtors® (NAR) issued a report summarizing existing home sales data, revealing a 4.3% decline in housing market activity in March 2024 compared to February last year. March's existing home sales reached a seasonally adjusted annual rate of 4.19 million, marking a 3.7% decrease from March 2023. Regionally, all four areas experienced price growth in March compared to a year ago. The Northeast led with a 9.9% gain, followed by the Midwest with a 7.5% increase, the West with a 6.7% rise, and the South with a 3.4% uptick. Homes are taking approximately 33 days to go from listing to contract in the current housing market, up from 29 days a year ago. Sales declined in all four regions in March compared to the previous year, with the South experiencing the largest drop with the Northeast having a 3.8% decrease. In comparison to February 2024, the Northeast region saw a 4.2% increase in sales, the highest of all in the nation. In March, single-family sales decreased by 4.3%, and condominium sales dropped by 4.9% compared to the previous month. Year-over-year, single-family home sales were down by 2.8%, while condominium sales fell by 11.4%. Weekly Highlights: The median list price reaches an all-time high. The median list price marked a new record high, representing an 8.7% increase from last year and a 1.1% uptick from just a week ago. Active listings continue to rise compared to last year. This spring has shown steady growth in active inventory compared to 2023, marking an 11.9% gain. Nevertheless, despite these increases, supply remains limited in most markets across the nation, especially in metro markets like New Jersey. Price decreases are occurring more frequently compared to 2023. More sellers are adjusting their asking prices downwards when needed. This week, 8.2% of active listings experienced a price decrease, marking a 1.5 percentage point increase compared to last year's figure of 6.7%. With mortgage rates in the 7+% range and list prices climbing, sellers modifying their prices is a strategic reaction to the buyer pool facing challenges entering the market. Daily Rate Index
Weekly Real Estate Monitor for April 15-19

This week saw mortgage interest rates continue to rise, starting the week at 7.44%, hitting 7.50% mid-week and back to 7.44% today. While these higher rates may dampen enthusiasm in the spring housing market, simultaneously there was an uptick in mortgage applications that occurred and it appears that prospective buyers are submitting applications as rates have been trending upward in recent weeks as well as the fact that the rate is only part of the equation when it comes to a home purchase, and truly it's a lifestyle decision that drives purchasing a home. While it's certainly encouraging to observe an improvement, it's crucial to grasp the underlying nature of this movement. Even during periods of consistent rate increases, there are typically intermittent moments of relief, and rarely do rates surge each successive day registering higher rates than the previous. In essence, it's premature to interpret this improvement as anything more than a temporary rebound, inherent to the broader fluctuations experienced previously. There's also a possibility that rates have risen sufficiently to establish a defensive stance ahead of the upcoming significant data release in early May. Further evaluation over the next two days will provide greater insight into this potential scenario. For consumers aiming to strike the right balance between securing an ideal rate and navigating home prices, the equation involves not just housing preferences but also affordability considerations. Home prices have surged to record highs for March, with 29% of homes selling above their asking prices. With the spring market reaching its peak intensity in June, it may be wise to take action before bidding wars intensify further amid limited inventory. Despite Higher Rates, Mortgage Applications Increase For the second consecutive week, mortgage interest rates have risen, alongside an increase in the volume of mortgage applications, according to the Mortgage Bankers Association (MBA). Joel Kan, MBA’s Vice President and Deputy Chief Economist, noted, “Rates increased for the second consecutive week, driven by incoming data indicating that the economy remains strong and inflation is proving tougher to bring down. Mortgage rates increased across the board, with the 30-year fixed rate reaching its highest level since December 2023. Despite these higher rates, application activity picked up, possibly as some borrowers decided to act in case rates continued to rise. Purchase applications drove most of the increase but remain at low levels, around 10% behind last year’s pace. Refinance applications increased very slightly, driven by a 3% gain in conventional applications.” Weekly Highlights: Contracts surpass 2023 levels for the first time. New contracts for the week ending exceeded those from the same period last year by 10.4%. Additionally, there was a notable 15.4% increase in new pending contracts compared to the previous week. Elevated levels of canceled listings. This week marked a significant 19.9% rise compared to the corresponding week last year. Canceled listings refer to listings where the seller and listing broker have terminated the agreement before its expiration date. This surge could indicate some sellers delaying their listings until later in the spring or summer. Increase in price reductions by sellers. There was a 7.9% price reduction of active listings which represents a 0.9% uptick from the same week last year. Sellers may be adjusting prices to attract more buyers, especially as mortgage rates have remained elevated recently. Daily Rate Index
Weekly Real Estate Monitor for April 8-12

The latest inflation figures, which rose to 3.5%, have halted the downward trend in inflation which also translated to an increase in interest rates. Despite this week's higher Consumer Price Index (CPI) reading and a surge in the 10-year treasury yield (the highest since November), this week rates started the week at 7.11%, peaked at 7.37% mid-week, and at 7.30% as of today. Expectations for the coming weeks are that mortgage interest rates are likely to continue to rise, which is disappointing news for prospective Spring home buyers. While first-time buyers lack housing equity to aid in their home purchase, those who have accrued housing equity through home price appreciation currently benefit in today's housing market. Interestingly, one-third of recent home buyers did not finance their home purchases last month — the highest share in a decade, so for these buyers, interest rates may hold less sway over their purchase decisions. Mortgage Borrowers Accelerating Pace of Refinancing Last week, conforming 30-year fixed-rate mortgages (FRM) once again surpassed the 7 percent mark, yet mortgage application activity managed to eke out a marginal increase. The Mortgage Bankers Association (MBA) reported that its Market Composite Index, which gauges application volume, rose by 0.1% on a seasonally adjusted basis. On an unadjusted basis, the Index saw a 0.2% uptick compared to the previous week. However, this slight uptick was solely attributable to a 10.0% surge in refinancing activity (up 4.0% year-over-year), while the volume of purchase mortgages dipped by 5.0% on a seasonally adjusted basis. Refinancing applications constituted 33.3% of total applications during the week, compared to 30.3% the prior week. Joel Kan, MBA’s Vice President and Deputy Chief Economist, remarked, “Mortgage rates climbed higher last week as several Federal Reserve officials reiterated a cautious stance on rate cuts. Inflation persists above the Fed’s target, and the broader economy displays resilience. Unexpectedly robust employment data released last week further fueled upward pressure on rates. The 30-year fixed rate reached 7.01%, its highest level in over a month. Purchase applications dropped by almost five percent, reaching their lowest level since the end of February, while refinance applications saw a 10% increase, notably driven by VA refinance applications.” Weekly Highlights: Showings surpassed last year's numbers. In the week concluding on April 7th, there was a 38.7% increase in showings compared to the corresponding week last year. Showing activity surged by 19.7% from the previous week, indicating heightened engagement as we transition into spring. The median list price achieves a new all-time high. The median list price increased 7.5% compared to the corresponding week last year and setting a new record high for week-to-week growth. It's important to note, the median list price is the middle value in a list of home prices arranged from lowest to highest, representing the price at which half of the homes in a particular area are listed for sale above and half below. It's a measure used in real estate to gauge the typical price range of homes available in a given market. Supply shows signs of growth. For the second month in a row, this week saw an increase of 13.9% in active listings year-over-year, which is another promising gain over last year. Daily Rate Index
Weekly Real Estate Monitor for April 1-5

This week, the job market was released which continues to display robust strength, evidenced by the addition of 303,000 net payroll jobs in March, bringing total job creation to 5.8 million since the pre-COVID peak four years ago. The construction industry saw a rise of 39,000 net new jobs, marking a 600,000 increase from four years ago, indicating forthcoming growth in housing supply. The increase in employment forecasts a potential rise in future housing demand. However, this surge in jobs may also prompt the Federal Reserve to reassess inflation risks, potentially stalling the decline in interest rates. Wage growth slowed to 4.1% in March after two consecutive years of gains above 5%, which could mitigate consumer price inflation. Mortgage rates are anticipated to remain steady, with no significant decreases expected in the coming months. High budget deficits will impede interest rate declines as government borrowing limits mortgage funding availability. Mortgage Rates More Stable Amidst rising Prices After starting the week at 7.05% an d at 6.99% as of yesterday. While lower rates could enhance affordability for prospective buyers, the stability of these rates may alleviate some stress and uncertainty in the home shopping process. With predictable rates, buyers can navigate potential homes with confidence, knowing what to anticipate financially. As home prices continue to rise, homeowners have the leverage of accrued housing equity with prospective sellers contemplating a move, even with an existing lower mortgage interest rate, might seek advice from professionals to assess the feasible down payment on a new property. Such deliberation could prove advantageous, particularly if their current home no longer suits their needs due to family or employment changes, as lifestyle changes, wants and needs (not financial gain) is the main reason many buy or sell a home. Weekly Highlights: Showings Slow Down for the Holiday The week ending March 31 saw a 19.9% decrease from the previous week and a 27.9% drop in showings compared to the same period last year. This slowdown can be attributed to buyers opting to spend time with family during the Easter holiday rather than looking at homes that particular week and weekend. Contracts Fall Back Under Last Year's Levels After being above last year's numbers for one week, contracts fell 6.7% below 2023 levels, landing at 6,082. The large year-over-year decrease can be attributed to the early timing of the Easter holiday this year. However, contract levels are expected to regulate throughout April as low inventory and fluctuating interest rates are still an ongoing obstacle for many homebuyers to navigate. Active Listings Continue Year-Over-Year Gains New listings saw a 2.9% decrease from the previous week. Despite the overall market activity slowing down due to the holiday, listings maintained a 5.4% gain over the same week last year. This may indicate that the supply of homes is turning a corner for buyers. Daily Rate Index Want to review sales data for your area? Check out our Market Snapshots HERE Finding this newsletter informative, have feedback or need guidance in buying and/or selling a home? Text 'LKRE' to 908.680.0902
Weekly Real Estate Monitor for Mar. 25-29

Mortgage interest rates have remained steady in the mid-6% range for a consecutive 16 weeks. The 30-year fixed mortgage interest rate experienced no changes drastic changes or swings this week, starting the week at 6.92% and at 6.91% as of yesterday. Housing affordability remains a key factor influencing the share of first-time buyers, which last month matched the lowest recorded share since 2008, standing at 26%. Additionally, inventory levels play a crucial role in shaping market dynamics and buyers are hoping for inventory to increase for the Spring market. Decrease in mortgage interest rates, but little change in mortgage application volume. The Mortgage Bankers Association reported a decline in its Market Composite Index last week, seemingly unaffected by a slight improvement in mortgage interest rates. The Index, a gauge of loan application volume, experienced a 0.7% decrease on a seasonally adjusted basis compared to the previous week. On an unadjusted basis, the Index dropped by 0.4% compared to the prior week. Joel Kan, MBA’s Vice President and Deputy Chief Economist, commented, “Mortgage application activity remained subdued last week despite the slight dip in mortgage rates. Although the 30-year fixed rate inched lower to 6.93%, it failed to stimulate borrower demand. Purchase applications remained essentially unchanged, as prospective homebuyers continue to wait for further declines in mortgage rates and increased listings in the housing market. While lower rates may eventually lead to a release of additional inventory as the lock-in effect diminishes, we anticipate this will occur gradually, with rates projected to approach 6% by year-end. Likewise, with rates remaining elevated, there's currently minimal incentive for rate/term refinances.” Existing home sales increase in February 2024, coinciding with a rise in inventory levels. The National Association of Realtors (NAR) released a summary of existing-home sales data, indicating a 9.5% increase in housing market activity in February 2024 compared to January 2024. February's existing-home sales reached a seasonally adjusted annual rate of 4.38 million. However, sales for February 2024 declined by 3.3% compared to February 2023. Inventory of unsold listings at the end of February increased by 5.9% from the previous month, totaling 1,070,000 homes for sale. Compared to February 2023, inventory levels were up by 10.3%. However, it will take 2.9 months to move the current level of inventory at the current sales pace, indicating that demand is outpacing supply making for a strong seller's market. In February, single-family home sales increased by 10.3%, while condominium sales rose by 2.5% compared to the previous month. However, compared to February 2023, single-family home sales were down by 2.7%, and condominium sales fell by 8.9%. The median sales price of single-family homes increased by 5.6% to $388,700 from February 2023, while the median sales price of condominiums rose by 6.7% to $344,000. Weekly Highlights: Inventory Continues to Rise Inventory has been increasing for the past 5 consecutive weeks. There were 27,071 active listings at the end of this week, which is 8.9% higher than the same week last year as supply has been increasing since mid-February. Active listings were up 1.1% from the previous week. New Contracts Catching Up to Last Year The number of new contracts is down slightly from the same week a year ago, but the spring market is approaching when contract activity is expected to increase. List Prices Remain Steady The median list price is up 5.2% compared to last year, keeping prices steady even with fluctuations with interest rates. Daily Rate Index
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
The anticipated outcomes of the 2024 NAR Commission Settlement

As I am sure you have heard in the news recently, last week on March 15, 2024, the National Association of Realtors (NAR) announced the resolution of a settlement with home sellers who alleged unfair commission practices and mandatory compensation for buyers' agents. This settlement follows an extensive and expensive legal dispute for the NAR, prompting inquiries from buyers and sellers regarding its implications for future real estate transactions. It is important to note that these changes are expected to take effect by mid-July 2024 and are still subject to court approval. Key Takeaway of the 2024 NAR settlement: The National Association of Realtors (NAR) will pay $418 million over the next four years to conclude legal disputes. This settlement addresses claims against the NAR, state and local Realtor associations, association-owned multiple listing services (MLS), brokerage firms with NAR member principals and sales volumes under $2 billion in 2022, and over a million individual NAR members, agents and brokers. The multiple listing service (MLS) system will no longer allow offers of broker compensation, shifting negotiations to occur privately between consumers and agents. Offers of compensation could continue to be an option consumers can pursue off-MLS through negotiation and consultation with real estate professionals. And sellers can offer buyer concessions on an MLS (for example—concessions for buyer closing costs). This change will go into effect in mid-July 2024. Requirement for all agents to have a written representation agreement or an Exclusive Buyer's Agency Agreement with their buyers, in states that allow, like New Jersey. This change will go into effect in mid-July 2024. How did we get here? The Sitzer-Burnett lawsuit, a class-action case initiated in Missouri federal court by a coalition of home sellers against the National Association of Realtors (NAR) and various defendants such as Anywhere, Berkshire Hathaway HomeServices, Keller Williams, and RE/MAX, alleged that real estate commission rates are excessive, buyer's agents are overcompensated, and NAR's Code of Ethics, MLS Handbook, and the defendants' practices contribute to inflated commission rates. During the October 2023 trial, the plaintiffs specifically contested cooperative compensation, where a listing broker offered compensation to the cooperating broker. While NAR presented evidence supporting the benefits of cooperative compensation for consumers and emphasized its rules against anticompetitive actions to promote a free market and competition, the jury ruled in favor of the plaintiffs. NAR believes this decision was influenced by legal errors in the judge's instructions that overlooked the procompetitive advantages of NAR's policies and cooperative compensation practices. How does the settlement affect home seller and home buyers? This settlement would preserve the choices consumers have regarding real estate services and compensation. After the new rule goes into effect, listing brokers and sellers could continue to offer compensation for buyer broker services, but such offers could not be communicated via the multiple listing service (MLS). How will buyer brokers get paid now? The types of compensation available for buyer brokers would continue to take multiple forms, depending on broker-consumer negotiations, including but not limited to: Fixed-fee commission paid directly by the buyer. Concession offered from the seller at closing to the buyer broker, if offered but not required. A portion (%) of the total listing broker’s compensation is paid by the seller at closing as it has been in the past and current structure, if offered but not required. Compensation would continue to be negotiable for both buyers and sellers and should always be negotiated between agents and the consumers they serve. What the National Association of Realtors Says The National Association of Realtors (NAR) asserts that although the settlement is deemed the most favorable course for consumers and real estate practitioners, it refutes any misconduct allegations. The organization underscores the customary practice of a collaborative commission split between sellers' and buyers' agents as a well-established industry norm. Despite maintaining innocence, securing agreeable settlement terms offers a constructive way forward to safeguard professional integrity and consumer options. Nykia Wright, the NAR's interim CEO, has articulated that prolonging litigation would adversely impact members and their small enterprises. Expected Impact on the Real Estate Industry While headlines may suggest that the recent developments could impact home affordability for buyers and the intention was to decrease home prices, these narratives are likely fleeting and sensational. It is essential to recognize that home values are primarily influenced by market fundamentals such as supply and demand, location, property condition, and recent sales data, among other factors, and agent commissions have no effect on determining property values but are an additional cost to home sellers. Some argue that the traditional commission structure has historically facilitated buyer representation by reducing upfront costs and broadening the pool of potential buyers. The seller typically bore the commission responsibility for both their listing agent and the buyer's agent, enabling buyers to consider properties at higher price points. Discussions on commission structures and buyer representation may evolve, potentially increasing awareness of the value of professional representation for buyers. However, the fundamental nature of the client-agent relationship and transaction processes is expected to remain largely unchanged and I feel this is a positive move that provides transparency to the industry as well as an opportunity for sellers to save money on the total sale. Conversely, it transfers additional costs to buyers who may now need to pay their agent an agreed-upon fee at closing if they choose to be represented by one. In the short term and with the current market conditions of high home prices, interest rates at or above 7%, and limited inventory this may create another layer of difficulty for home buyers to secure a home with the cost of representation now being an additional closing cost if a seller does not choose to offer a concession for that cost on behalf of the buyer. Commission fees have always been and will continue to be negotiable, despite a standard market-determined percentage guideline or what society has deemed to believe is a required "6% fee". These fees are typically agreed upon between sellers and their listing agent and a portion of that total is shared with the buyer side agent, rather than a fixed figure. While there are cost-effective options in the market and always will be, it's crucial to compare the level of service and knowledge provided as well as the value received for both parties. As with any service industry, quality often aligns with price. Buyers seeking representation when purchasing a home will now need to exercise some research, pros and cons comparison, and caution to ensure their needs are met effectively. Buyer's agency is a valuable asset in New Jersey, as not all states offer this representation, but as with any service, not all consumers need or will need agent representation both on the buying and selling side. For personalized insights on how the NAR settlement may affect you as a buyer or seller in New Jersey, feel free to reach out with any questions. I am here to address your concerns and provide clarity on what to anticipate in light of these changes when the time comes or when you are ready.
Weekly Real Estate Monitor for Mar. 11-15

This week, mortgage interest rates climbed back above the 7% mark due to the release of the Consumer Price Index (CPI) reporting released on Tuesday (3/12). Starting the week at 6.87% and slowly increased to 7.02% as of yesterday. While Tuesday's consumer-oriented inflation report (CPI) was anticipated to potentially stir up market activity, it was actually yesterday's wholesale inflation report that had the most significant impact. The Producer Price Index (PPI) revealed wholesale inflation exceeding expectations by a considerable margin (0.6% month-over-month compared to a median forecast of 0.3%). Even when excluding the more volatile food and energy prices to gauge "core" inflation, PPI still rose by 0.3% against forecasts of 0.2%. Though these figures may appear modest, it's crucial to note that the Federal Reserve aims for a 2.0% annual inflation rate at the core level. Given that inflation is a primary concern for interest rates, it's unsurprising to witness rates climbing due to this Today's uptick brings the average conventional 30-year fixed rate above 7% for the first time in a while. Consumer Price Index (CPI) Update Consumer prices are experiencing a slower rate of increase compared to much of the past three years, yet they remain above the Federal Reserve's desired target of 2%. In February, the Consumer Price Index (CPI) increased by 3.2%. Notably, the significant "core inflation" component rose by 3.75%, marking its lowest reading since April 2021. Despite the heavyweight component of housing/shelter decelerating to 5.7%, the overall CPI remains above the 2% target. However, many unofficial private sector data sources suggest much lower rent growth than official measurements indicate. These latest figures are not expected to fundamentally alter the Federal Reserve's likely actions, which include three anticipated rate cuts this year. Anticipated easing in inflation, particularly as official rent measurements show signs of stabilizing, could lead to five to eight rounds of rate cuts by the end of next year, aimed at reducing mortgage rates. However, a significant limiting factor is the substantial budget deficit. Increased government borrowing would result in fewer funds available for mortgage borrowing. There is a likelihood that mortgage rates could approach 6%, though further decreases would be challenging to achieve. Housing Affordability Conditions Showed Improvement in January 2024 According to the National Association of Realtors (NAR), housing affordability increased at the national level in January compared to the previous month. The monthly mortgage payment dropped by 2.4%, while the median price of single-family homes decreased slightly by 0.3%. This resulted in a $49 decrease in the monthly mortgage payment compared to the previous month. However, compared to one year ago, affordability declined in January. The monthly mortgage payment increased by 9.1%, while median family income rose by 5.3%. The effective 30-year fixed mortgage rate also rose from 6.35% to 6.72% year-over-year. Despite this, mortgage rates remained below 7% for the second consecutive month. The Mortgage Bankers Association reported a modest increase in mortgage credit availability and a 9.7% increase in mortgage applications from the previous week. The decrease in mortgage rates has positively impacted potential home buyers, along with the increase in median family incomes and decline in qualifying incomes, contributing to improved affordability conditions. Weekly Highlights: Listings have consistently surpassed last year's figures for six weeks in a row. For six consecutive weeks, the number of new listings has surpassed those of the previous year. Compared to the corresponding period last year, there has been a 4.1% rise in listings, with a 2.5% increase observed in the past week alone. The median list price is just slightly below its record high. After reaching a record-high median list, the current median list price has decreased by 1.0%, now resting at $415,000. Remarkably, both last week and this week showcase higher median list prices than any week in the preceding year, with this week's price surpassing last year's by 4.0%. Contracts are slightly below last year's figures. This week saw a slight decrease of 2.2% compared to last year. While the supply has seen modest growth in comparison to the previous year, a significant factor to consider is the recent movement of 30-year mortgage rates, which have crept back towards the 7% threshold. The rising rates are likely playing a role in the sluggish pace of contract signings, despite there being more homes available than last year.
Weekly Real Estate Monitor for Mar. 4-8

Like last week, mortgage interest rates saw even more relief and continued to trended downward from 7.08% the previous week. Rates started the week at 7.09% and decreased throughout the week to 6.97% as of yesterday. Consequently, many borrowers can expect quotes ranging from 7-7.125% for top-tier scenarios, with some fortunate individuals securing rates as low as 6.875%. It is important to note that top-tier scenarios are based on credit scores of 780+ and a minimum down payment of 20% for purchases. The resurgence in mortgage rates can be attributed to the same economic factors that led to rate increases three weeks ago. On February 13th, a surge in inflation data caused rates to spike. While the subsequent two weeks lacked significant data releases, the recent data has been more favorable for rates since last Thursday. It has required a combination of multiple reports to counteract the impact of the inflation data from the 13th. Looking ahead, an upcoming report later today Friday holds equal potential to influence the market significantly. Positive Housing Data Increases Mortgage Applications by 9.7% This slight improvement may be the first initial signs of a spring market awakening. The Mortgage Bankers Association (MBA) disclosed that its Market Composite Index, which gauges application volume, surged by 9.7% on a seasonally adjusted basis compared to the previous week. The Mortgage Bankers Association (MBA) Senior Vice President and Chief Economist, Mike Fratantoni remarked, "The recent inflation data did not significantly deviate from expectations, leading to a slight decrease in mortgage rates, with the 30-year fixed rate dipping slightly to 7.02% last week. Mortgage applications notably increased compared to the prior week, which encompassed the President's Day holiday. Notably, purchase activity – especially for FHA loans – exhibited strong growth, underscoring how responsive first-time homebuyers are to even minor shifts in rate trends." Fratantoni also highlighted positive trends in new listings from other housing data sources, signaling optimism for the upcoming spring buying season amidst limited available inventory for sale. Jobs Report Update The most recent employment data presented a varied outlook. February saw a robust increase of 275,000 net new payroll jobs, bringing the total jobs count to 5.5 million higher than the pre-COVID peak in early 2020. However, the unemployment rate rose to 3.9% due to a different job measurement method from a household survey, which indicated 184,000 fewer workers. While the monthly wage growth of 0.14% was the slowest in two years, the annual wage increase of 4.3% outpaced the consumer price inflation of 3.1%. The continuous growth in job numbers contributes to sustained demand in real estate for residential properties, retail spaces, warehouses, and travel accommodations, although not necessarily for office spaces. Short-term property purchase decisions are influenced by mortgage rates and inventory levels. Home sales in 2023 hit a three-decade low, with current payroll job figures at 158 million compared to 117 million during a similar period of low home sales activity. This suggests significant latent real estate demand waiting to engage once short-term conditions become more favorable.
Weekly Real Estate Monitor for Feb. 19-23

The prospects for the spring market appear brighter as January showed an increase in both the pace of existing home sales and the size of unsold inventory. The National Association of Realtors (NAR) reported that existing home sales rose by 3.1% from December to an annual rate of 4.00 million, although still 1.7% lower than January 2023. Single-family home sales increased by 3.4% to 3.6 million, while condo sales remained flat at 400,000. The median home price for all residential sales climbed by 5.1% with prices for single-family homes and condos also rising. The National Association of Realtors (NAR) Chief Economist Lawrence Yun mentioned that the increase in listings and homebuyer activity is a positive sign for the overall market with inventory of unsold homes slightly improved to a 3.0-month supply at the current sales rate. Home prices however still continued to rise, marking the seventh consecutive month of annual price gains. The More Homes on the Market Act (H.R. 1321), aims to lower taxes on home sales to stimulate additional inventory in the market. Kevin Sears, the current The National Association of Realtors (NAR) president, highlighted the importance of more listings to facilitate Americans' ability to move. Existing-Home Sales Rose 3.1% in January In January, existing-home sales showed growth as reported by the National Association of REALTORS®. Sales accelerated in the Midwest, South, and West regions, while remaining steady in the Northeast. Year-over-year comparisons revealed an increase in sales in the West and a decrease in the Northeast, Midwest, and South.Total existing-home sales, which encompass single-family homes, townhomes, condominiums, and co-ops, rose by 3.1% from December to reach a seasonally adjusted annual rate of 4.00 million in January. However, compared to January 2023's figure of 4.07 million, there was a 1.7% decline.NAR's Chief Economist Lawrence Yun noted that while current home sales are lower than previous years, January's increase signals a shift in supply and demand dynamics. With slightly higher listings and favorable mortgage rates compared to the previous year, homebuyers are taking advantage of these conditions. The total housing inventory at the end of January stood at 1.01 million units, marking a 2.0% increase from December and a 3.1% rise from a year ago. Unsold inventory represents a 3.0-month supply at the current sales pace, slightly down from December but up from January 2023. Price hikes were observed across all four U.S. regions and Yun highlighted that the median home price hit a record high for January, with competitive bidding on mid-priced homes leading to quick sales. The prevalence of cash deals at 32% indicates a market characterized by multiple offers and driven by historically high housing wealth levels. Decrease in Mortgage Applications as Rates Exceed 7% Again Last week, interest rates headed north of 7% for the first time since November 2023 and continued to dampen mortgage applications and this week was no different. Rates started the week at 7.14% and at 7.10% as of today, a slight improvement from the beginning of the week. The Mortgage Bankers Association (MBA) reported a 10.6% decrease in its Market Composite Index, measuring application volume, for the week ending February 16. Before adjustment, the volume saw an 8.0% decline with the Refinance Index droping by 11.0% compared to the previous week but showed a slight 0.1% increase from a year ago. The Mortgage Bankers Association (MBA) SVP and Chief Economist, Mike Fratantoni, noted that mortgage rates rose above 7% last week due to increased inflation in January, reducing expectations of an imminent rate cut. This led to a significant decline in mortgage applications, particularly in refinancing. The impact of these rate changes on potential homebuyers is notable, as higher rates and home values are affecting affordability in a market constrained by limited supply. Weekly Highlights: Accelerating Pace of Contract Timelines. The median time to contract for the week ending February 18 decreased by two days compared to the previous week, standing at 18 days, and was three days quicker than the same week last year. It is anticipated that the time to contract will continue to decrease in the upcoming weeks as more buyers initiate their search with the onset of the spring buying season. Median List Price Increases. The median list price sees a 5.1% surge from last week and is a nearly equal jump from last year at this time by 5.2%. Buyers may not be encouraged by the higher list prices; however, good news continues as the number of new listings has surpassed last year for three weeks in a row now. Showings continue stagnation this winter. Showings have been gradually decreasing this winter, reaching a total of 81,685 showings. This marks a 14.6% decline compared to the same period last year, with a slight 0.3% decrease from the previous week.
Weekly Real Estate Monitor for Feb. 12-16

This week saw an increase in the 30-year fixed mortgage interest rate as the rates climbed back over 7%. The week started with rates at 6.96%, an already slight increase from the previous week, and at 7.14% as of today. Although rates have inched their way back, the overall trend since fall 2023 has been downward. While there are still expectations that rates may decrease to a lower 6% range later in the year, buyers are advised to weigh the pros and cons of each scenario and the overall impact on their home purchase decisions, as home prices are also expected to rise due to limited inventory. Timing the real estate market solely based on mortgage interest rates, especially marginal changes, is just one part of the equation as other factors such as market conditions, lifestyle wants/needs, and personal circumstances should be considered. Inflation Update The recent 3.1% increase in the consumer price index in January is still considered high with the target inflation rate still being 2%. One significant factor contributing to this persistent high inflation is the 6% rise in housing shelter inflation, despite apartment rents stabilizing and single-family rent growth being modest. It's important to note that home prices are not included in the inflation measurement, as they are considered assets, similar to stock prices. It is anticipated that the Federal Reserve will not reduce interest rates in the first half of the year as expected but the multiple (approx. 3-5) rate cuts may still occur in the second half of the year as rent measures are expected to become more stable. AS or right now, mortgage rates are projected to fluctuate weekly but are favored to trend towards 6% by the end of the year. January Housing Starts Plunge, Signaling Continued Shortage In January, there was a significant downturn in housing starts, exacerbated by heavier snowfall in many regions. Seasonally adjusted figures suggest a persistent housing shortage. Multifamily construction saw a 37% decrease from the previous year, marking one of the lowest levels of activity in the past decade. This drop is attributed to an oversupply from the last three years, not a reduction in renters, leading developers to scale back construction efforts. Single-family home construction also declined by 5% from the previous month, yet it stayed above the crucial threshold of 1 million units. To effectively address the housing shortage, single-family starts should ideally reach 1.2 million units. The United States faced a significant housing production deficit in the decade preceding the COVID pandemic, and a problem that continues to affect the market. Addressing this shortage requires incentivizing construction, however, certain local policies, such as rent control, NIMBYism, and increased impact fees, could exacerbate the shortage and ultimately drive up long-term housing costs Weekly Highlights: Listings Continue to Climb Over Last Year. There was a 3.1% increase over the previous year in listings for the week. This increase is a positive sign for the supply situation, which has been a source of frustration for buyers. However, tight supply is expected to persist as although prices have cooled slightly week-over-week, they remain high for buyers, being 5.4% higher than the same week in 2023. Another Week of Relief for List Prices. The median time to contract tightened at a consistent pace, reaching 20 days for the week ending February 11. This marked the fourth consecutive week of a two-day drop in the time to contract and was three days faster than the same week last year. Steady Decrease in Time to Contract. The housing market continues to experience fluctuations in listings and prices, impacting both buyers and sellers. The data suggests ongoing challenges related to supply and demand dynamics, as well as affordability concerns for potential homebuyers.
Weekly Real Estate Monitor for Feb. 5-9

For the past eight weeks, the 30-year fixed mortgage rate has shown consistent stability, while the 10-year treasury yield has recently risen to 4.1%, sparking speculation that the 30-year mortgage rate might follow suit. Rates increased to 7.04% at the beginning of the week but adjusting below 7%, to 6.97% as of yesterday. Homebuyers are finding some relief in the steady mortgage market. Still, affordability issues continue as housing inventory is tight and a potential challenge for the upcoming spring season. While this benefits homeowners by increasing their equity, it poses difficulties for buyers in finding affordable homes within their budgets. Pending Sales Climb as Mortgage Rates Come Down Pending home sales in December 2023 surged, with an 8.3% increase from November and a 1.3% rise from the previous year, marking the highest level since July of that year. This substantial growth was attributed to a significant drop in mortgage rates, with the average 30-year-fixed mortgage rate falling to 6.82% in December from 7.44% in November, the most substantial monthly decline since 2008. The softer mortgage rates have enticed more buyers into the market, leading to increased activity. The housing market is anticipated to gain further momentum as spring approaches, as long as mortgage rates remain stable Weekly Highlights: The number of property listings has surpassed the previous year's figures. This week marked a 3.7% increase from the corresponding week last year and a significant 19.5% jump from the preceding week, indicating a potentially active market for February. Property showings are on the rise. Despite being 11.6% lower than the previous year, showings are gathering pace, with showings recording an 8.2% increase from last week. The median listing price remains unchanged. For the second consecutive week, the median listing price is steady at 5.4% above the price during the same week last year.
Weekly Real Estate Monitor for Jan. 15-19

Home buyers can celebrate the sustained decline in mortgage interest rates over the last few weeks of the new year, with rates fluctuating slightly but ultimately staying below 7%. This week with the observance of MLK day, rates started the week at 6.77% and 6.89% as of yesterday, with the historical average for mortgage interest rates since 1971 being 7.74%. For prospective home buyers, the winter season is an opportune time to establish financial goals for the upcoming year. If a home purchase is on the financial horizon, now is the ideal moment to focus on financial cleanup and engage with a financial planner, mortgage broker, and real estate agent to get your options on the table and learn about the process. Permits and Positive Builder Sentiment Elevate Housing Expectations for Spring Housing aspirations for spring received a boost from permits and positive sentiment within the homebuilding sector, despite December's housing starts failing to maintain the growth seen in November. The U.S. Census Bureau and the Department of Housing and Urban Development reported that housing starts in the U.S. were at a seasonally adjusted annual rate of 1.460 million units in December, reflecting a 4.3% decrease for the month. While November starts were revised down from a 1.560 million rate to 1.525 million, the month still boasted the highest figures of the year. December starts surpassed the prior year's pace by 7.5% and exceeded the analysts' forecast of 1.425 million. In the breakdown, single-family starts registered an annual rate of 1.027 million units, experiencing an 8.6% month-over-month decline. On the other hand, multifamily starts saw a 7.5% increase, reaching a 417,000 annual pace. Single-family starts were notably 15.8% higher than the previous December, while multifamily starts witnessed a 9.5% decrease. The overall permit activity and positive reports from the National Association of Home Builders (NAHB) indicate the potential for a resurgence in construction during the upcoming spring season. Increase in Mortgage Application Volume Continues Following Rate Drop The surge in mortgage application activity persisted following the holidays, as reported for the week ending January 12. According to the Mortgage Bankers Association (MBA), the Market Composite Index, a gauge of mortgage loan application volume, experienced a 10.4% increase on a seasonally adjusted basis compared to the previous week. In the initial week of the year, the index had shown a 10% gain, adjusting for the New Year holiday. On an unadjusted basis, the index witnessed a substantial 26.0% rise. Joel Kan, MBA's Vice President and Deputy Chief Economist, attributed these trends to a decline in mortgage rates across all loan types. The 30-year fixed rate, in particular, saw a six basis points decrease, marking the lowest rate in three weeks. Kan expressed cautious optimism, stating that if rates continue to ease, there is a potential for increased home purchases and prices in the coming months. Weekly Highlights: New listings have slightly surpassed the figures from the previous year. In the week ending January 14, 2024, new listings increased 1.3% compared to the corresponding week a year ago. Despite this rise in listings, the inventory remains limited, presenting a challenge for potential buyers even as interest rates ease. List prices have experienced a notable surge compared to last year. The median list price for this week reached a significant 5.7% uptick from the previous year. Sellers have consistently taken advantage of the low overall market supply, enabling them to ask for higher asking prices. January has witnessed a rise in showings, potentially signaling a robust first quarter. Although showing activity is slightly lower than the previous year, there has been a steady increase in showings during the initial two weeks of January. This trend could be indicative of a strong start to the first quarter.
Weekly Real Estate Monitor for Jan. 8-12

Mortgage interest rates continue to remain stable in the new year, starting the week at 6.72% and at 6.74% as of yesterday. Rates have been holding steady since December 21 which has helped potential home buyers make informed plans as they enter the real estate market, and ensure that the homes they consider are well within their anticipated price range without the expectation of significant fluctuations. With expectations of mortgage interest rates anticipated to decrease further throughout the year due to satisfactory consumer inflation reports, more buyers are expected to enter the market between now and the Spring. However, like everything, there are pros and cons, and lower rates could lead to increased competition and intensified bidding as limited housing inventory is and has been an ongoing issue. Even when rates were higher in 2023 and there were fewer buyers, the primary challenge for home buyers was finding the right home. Consumer Inflation Report Update In December, consumer price inflation increased by 3.4%, slightly surpassing the 3.1% recorded in November. However, the overarching trend indicates a more subdued inflation environment compared to 2022. Despite these figures, the Federal Reserve's expectations to reduce interest rates by at least three times this year remain unchanged at this time. A significant factor, housing rent, is also exhibiting a more stable trend. This is reflected in the key core inflation, which excludes the volatile energy and food components, experiencing a modest 3.9% annual gain – its smallest increase in nearly three years. Given the Federal Reserve's emphasis on "core" inflation, there is potential for a more assertive approach in lowering interest rates later in the year, particularly if rent continues to show signs of cooling in the coming months – a possibility indicated by the ongoing apartment construction boom. It's important to note that home prices are not factored into consumer price inflation. However, an improvement in housing affordability could be achieved if mortgage rates decline. Weekly Highlights: Following a three-week hiatus, there was a noticeable surge in list prices. Prices on the market experienced a notable surge following a three-week hiatus. After remaining constant at $350,000 for three weeks, there was an abrupt 8.6% increase, bringing the median list price to $380,000. In comparison to the same period last year, the median list price in the Bright MLS service area has risen by 4.0% The initial week of 2024 shows an increase in new listings hitting the market. The initial week of 2024 saw a significant influx of new listings, a marginal 3.4% decrease compared to the first week of 2023. Impressively, the number of new listings almost doubled, witnessing a remarkable 95.3% increase from the previous week. Part of this data is influenced by listing agreements expiring towards the end of the year and being re-listed as new listings. The pace of home sales has accelerated compared to one year ago. Homes are now selling at an accelerated pace compared to a year ago. The median time to contract, concluding on January 7, was 31 days, indicating that half of the homes secured a contract within a month or less. Although this is one day slower than the previous week, it is notably 5 days quicker than the corresponding period last year.
Weekly Real Estate Monitor for Jan. 1-5

At the onset of the new year, mortgage interest rates exhibited minimal fluctuation but we need more time to gather more data in the new year to truly get a sense of where they are headed. Following a gradual decline over the past nine weeks, there was a slight uptick, starting Jan 2nd at 6,72% (up + 0.05% from the last week of 2023) and 6.76% as of yesterday. The expectations for the overall trend in mortgage interest rates throughout 2024 lean towards a decrease, despite the ongoing adjustments weekly, the average rate is expected to experience a general decline. As prospective home buyers gear up for the spring market, understanding the pros and cons of the economics of this market becomes crucial for securing the most favorable rate and terms. Furthermore, individuals looking to optimize their mortgage interest rate should focus on improving their debt-to-income ratios and credit scores, as these factors play a role in determining the rate they qualify for and a leading indicator of how a lender or lending institution qualifies you ( a buyer) for a loan. Feel free to watch my video of How A Mortgage Works. Jobs Report Update The latest employment figures present a mixed scenario. As per the household survey, there was a decline of 683,000 employed Americans in December. Despite this, the unemployment rate remained stable at 3.7% because 845,000 individuals exited the labor force without actively seeking employment. This survey data is considered less reliable than company payroll data, which indicates a job gain of 216,000. Additionally, the most recent average hourly earnings saw a 4.1% increase, reaching $34.27. Although this marks an acceleration from the previous month's 4.0%, it is a decrease from the 4.8% reported a year ago. Wall Street places greater emphasis on the more dependable payroll data and the pressure of wage inflation. Consequently, the bond market anticipates a more cautious stance from the Federal Reserve regarding interest rate reductions this year. The benchmark 10-year Treasury yield has experienced a slight increase, suggesting that the recent declines in mortgage rates are unlikely to persist unless economic data indicates a softer inflation outlook. Beyond the job market, the U.S. government is seeking to issue more bonds to address its substantial budget deficit, potentially requiring higher interest rates to attract more bond buyers. However, some bond investors are also uneasy about the prospect of a government shutdown.
Weekly Real Estate Monitor for Jan. 22-26

This week brings positive developments in the housing sector as mortgage interest rates remained below 7% for the sixth consecutive week, but there was an increase from last week, starting the week at 6.87% and at 6.90% today. The response from home buyers to the recent mortgage rate decreases has seen a year-over-year increase of 5% in December showings. Additionally, there is encouraging news on the mortgage application front, with a 3.7% rise from the previous week along with new home sales also experiencing growth. Although 2023 presented challenges in the housing market, there are numerous reasons for optimism in 2024. Decreased mortgage interest rates are likely to motivate both buyers and sellers to reconsider their positions. Life events such as family changes, new job opportunities, and retirements continue to drive housing consumer needs, prompting the search for new locations and homes that align with their evolving lifestyles. Empowering Trends in Single Women Home Buyers Historically, legal hurdles for women obtaining mortgages without co-signers were overcome only in 1974. In 1981, 11% of home buyers were single women; today, that figure is at 19%. The recent rise is partly attributed to a decrease in married Americans, translating to 34% of one-person households in 2022. Single women buyers stand out for purchasing homes close to friends and family, while men often cite family changes. Multigenerational living and caregiving responsibilities may contribute to women's preference for homeownership. Financially, women typically enter the market with a median income of $69,600 compared to single men at $83,800. Despite lower incomes, 45% of women make financial sacrifices, emphasizing their commitment to homeownership. Interestingly, women's age as first-time buyers is slightly higher, at a median of 38, compared to men at 33. Women make more significant sacrifices, such as cutting spending and even taking on second jobs. Down payment sources reveal men often rely on savings, stocks, or loans, while women frequently use proceeds from selling their last home or receive gifts from friends or family. Weekly Highlights: New listings drop below the previous year's figures. Despite a surge in new listings towards the close of 2023 and the beginning of 2024, the week ending January 21 witnessed a 10.2% decline from the previous year. Inclement weather due to passing tropical storms in December and January contributed to a temporary slowdown in market activity. Showings are on hold due to adverse weather conditions. In the week ending January 21, there was a substantial 27.5% decrease in showings compared to the corresponding period last year. The drop in showings, like other aspects of market activity, can be partially attributed to winter storms affecting the region. List prices continue to rise unaffected. The median list price increased by 5.3% compared to the previous year. If this trend persists, there is a possibility of reaching new all-time highs later in the year.
Weekly Real Estate Monitor for Jan. 29 - Feb. 2

As expected, the Federal Reserve opted to keep its short-term federal funds rate interest rate unchanged on Wednesday, maintaining it at 5.375%. However, the Fed hinted at the possibility of implementing several cuts later in the year in anticipation of its future policy. Based on this decision the bond market, including mortgage-backed securities, has already driven down longer-term interest rates. It's worth recalling that before the economic lockdown induced by COVID, the Federal Funds Rate stood near 2%, and 30-year fixed mortgage rates were nearly 4%. We shouldn't anticipate a return to these levels this year or the next as the persistent high budget deficit and elevated inflation metrics suggest that mortgage rates will likely hover in the 6% to 7% range for most of the year. While this rate is lower than the recent peak of 8% a few months ago, it contributes to improved housing affordability and is expected to draw more homebuyers back into the market. Additionally, many postponed home sellers may now be inclined to forgo the expectations of rates between 3% and 4% due to changes in life circumstances, potentially boosting inventory with home sales expecting to see an upswing this year. Weekly Highlights: Contracts have experienced a decline from the previous year. The disparity between the new contract figures for this year and those of the same week in the previous year has continued to expand, witnessing a decrease of 12.9% in new contracts. Inventory may be part of the problem as there are fewer homes available to present contracts on. Contract durations resemble those of 2023. The median time to secure a contract for this week was 24 days, demonstrating a slight acceleration of one day compared to the preceding week. In comparison to the corresponding week last year, the median time to contract remains unchanged. As we approach the spring buying season, the median time is expected to decrease, although the market's pace may vary from the previous year based on the speed at which buyers and sellers respond to lower interest rates. New listings are rebounding from the wintry conditions. A 6.0% decrease from the previous year, they have significantly recovered from the impact of last week's winter weather, showcasing a 5.2% improvement.
Are Tiny Houses a Solution to the Housing Crisis in NJ?

The accessory-dwelling-unit boom could mean more affordable housing for New Jersey residents.This Princeton ADU (the structure seen at right), designed by architect Marina Rubina, is roughly 1,000 square feet. Rubina looks to make the most out of any size home based on her “livable, lovable density” model of architecture.Related posts fromNew Jersey Monthly:Montclair Family Makes Their Home on a Repurposed $20K School BusThe Pandemic Fueled These Incredible Home Renovation ProjectsHow to Create Pockets of Sanctuary at HomeAfter the pandemic devastated nursing homes around the country, many elderly people wanted to find a different way of living out their golden years — one that would keep them in their homes and communities.That’s just one reason why Accessory Dwelling Units (ADUs) — small, single housing units located on the properties of larger, single-family homes — have become popular in New Jersey.“Many [elderly] people want to age in place. They want to keep the same doctors and houses of worship and neighborhoods. Disruptions can be difficult for older people to adjust to,” says Ann Lippel, a Montclair Gateway Aging in Place board member who has been advocating for ADUs in the Essex County town since 2015.After more than a decade of discussion, Montclair finally passed an ADU ordinance in February, making it legal to have one of these tiny homes. Montclair joins a short list of other municipalities around the state that have passed ADU ordinances, including Princeton, Maplewood, East Orange and Bradley Beach. Restrictions regarding things such as square footage and number of stories an ADU can have vary by town.Architect Marina Rubina Rubina aims to “make small places feel large.”Harold Simon, an affordable-housing advocate and expert who lives in Montclair, recalls trying to get the same ordinance passed in town back in 2011 — to no avail. “Montclair, like every other community in New Jersey, has a need for more housing, but it’s an old community,” says Simon. “There are real limits to how much more housing you could put into a place like Montclair. So you could either build apartment buildings or you could add an ADU.”An ADU must work in unity with the main residence, Rubina says.ADUs aren’t just for the elderly. The units can be an alternative for any adult looking to rent. And because ADUs are built on already-owned properties, more homes can be added to the market without the need for more space. Many say ADUs are a potential solution to the housing crisis.Click here to continue reading this story on New Jersey Monthly. The post Are Tiny Houses a Solution to the Housing Crisis in NJ? appeared first on DesignNJ.

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Are Tiny Houses a Solution to the Housing Crisis in NJ?