June 2018 Mortgage Newsletter

Rates Continue to Trend Upward
Next week the Fed will be meeting again and the consensus is that they will increase rates several times this year. Anyone that has a Prime+ loan will be impacted. These types of loans are common for home equity loans and commercial loans. We can definitely try to refinance mortgages that have a variable rate indexed to prime.

Moody’s is reporting that there is a large number of interest only commercial loans and 2007 can happen all over again as it relates to the Commercial Mortgage Bond Market. These can be very risky since there is little or no equity and with Interest rates rising, there could be a bubble. Hopefully this will not have a negative impact on Residential Mortgage Interest rates and the overall Real Estate Market that seems to be steady and healthy.

In its Primary Mortgage Market Survey, Freddie Mac reported a rate of 4.66% for the week ending May 24th. This was the highest since weekending 5/2/2011 when the rate was 4.71%. Although the rate did come down to 4.55% the week ending May 31st, the trend is for rates to increase. That being said, rates are still very attractive for Home Buyers.

Currently our rates are exactly the same as they were at the beginning of the May. Again, we feel that rates will trend upward. Here are our rates:

Conventional 30 Year Fixed 4.25% APR

Conventional 15 Year Fixed 3.75% APR

FHA 30 Year Fixed 3.75%

10 Year ARM 4%

7 Year ARM 3.875%

The New Jersey Association of Realtors released its report for Real Estate activity in the state of New Jersey for the Month of April. As always, there is some very interesting data:

New Jersey YTD 2017 YTD 2018 % Change
New Listings 64,225 63,102 -1.7%
Pending Sales 38,178 39,300 +2.9%
Closed Sales 30,852 30,965 +0.4%
Median Sales Price $260,000 $274,000 +5.4%
Average Sales Price $340,918 $350,116 +2.9%
Days on Market 82 72 -12.2%
Affordability Index 166 152 -8.4%
Look at the decrease in affordability. Homes are becoming less affordable, the median price jumped much more than the average sales price. I still think that the jump in sales price of 5.4% is substantial. With rates increasing, there will be a negative impact on affordability.

This month we would like to present the Condo-Townhouse Market Segment. Check out these gaudy numbers:

New Jersey YTD 2017 YTD 2018 % Change
New Listings 3,271 3,231 -1.2%
Pending Sales 2,355 2,214 -6.0%
Closed Sales 1,974 1,892 -4.2%
Median Sales Price $170,000 $189,000 +11.2%
Average Sales Price $207,613 $226,082 +8.9%
Days on Market 76 66 -15.4%
A jump of 11.2% in the Median Sales Price and 8.9% in average are absolutely huge numbers and terrific for sellers. Buyers should get in as soon as possible to avoid future increases. Demand seems to be robust and the supply is actually going done so far this year.

We will be hosting a Free Home Buyer Seminar June 16th. For more information and registration, please visit www.HomeBuyer-Seminar.com All attendees receive a free 150 page Home Buyer workbook and a $1,000 Closing cost coupon. At the Homebuyer Seminar speakers provide valuable tools that assist in the Home Buying Process. Topics include Title Insurance, Pitfalls to avoid, how to get the best interest rates, no closing cost transactions, all about Credit reports and much more. Reserve your spot today while there is availability.

Vibha Singh
NMLS ID 66034

Ambika Singh
Loan Officer
NMLS ID 1541005
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