October Mortgage Newsletter

Affordability
According to the National Association of Home Builders, housing affordability is at a 10-year low. This is due to the combination of higher interest rates and increased building materials. Nationwide, in the past 12 months home prices are up 6% and income is up 2.6%. Here are year to date numbers for affordability of single family homes and Condo /Townhomes:

Single Family Index %Change
2016 142 +4.4%
2017 144 +1.4%
2018 130 -9.7%
Condo/Townhouse Index %Change
2016 176 +5.4%
2017 175 -0.6%
2018 159 -9.1%
Unfortunately, it is inevitable for affordability to have a negative impact on the Real Estate Market.

We have seen a sharp increase in Mortgage Rates in the last month. The 30 Year Fixed rate has increased .25% during the last month. As rates continue to rise, Adjustable rate mortgages will become more attractive to some home buyers. Here are our rates:

Conventional 30 Year Fixed 4.50% APR

Conventional 15 Year Fixed 3.75% APR

FHA 30 Year Fixed 3.875%

10 Year ARM 4.25%

7 Year ARM 4.125%

The New Jersey Association of Realtors released its report for Real Estate activity in the state of New Jersey for the Month of August. Here are some year to date (YTD) numbers:

New Jersey YTD 2017 YTD 2018 % Change
New Listings 131,313 132,316 +0.8%
Pending Sales 82,942 84,006 +1.3%
Closed Sales 77,600 78,356 +1.0%
Median Sales Price $280,000 $292,500 +4.5%
Average Sales Price $361,917 $370,443 +2.4%
Days on Market 72 64 -11.1%
Affordability Index 156 140 -10.3%
Look at the huge decrease in affordability. Other than the affordability index, all the other numbers seem to be associated with a well-balanced market. So, it’s a good time to be a buyer or seller.

This month we would like to present the popular Condo-Townhouse Market Segment. Check out Year to Date (YTD) numbers:

New Jersey YTD 2017 YTD 2018 % Change
New Listings 26,114 26,752 +2.4%
Pending Sales 17,367 17,561 +1.1%
Closed Sales 16,127 16,413 +1.8%
Median Sales Price $250,000 $257,000 +2.8%
Average Sales Price $319,538 $328,238 +2.7%
Days on Market 71 62 -9.1%
The Condo/Townhouse market segment is very similar to the overall market. It is well balanced. Good times for both buyers and sellers.

Although we don’t have any Home Buyer seminars scheduled for the rest of this year. We will start up again in January. You can find information about the seminars at www.HomeBuyer-Seminar.com Please feel free to reach out to me with any questions you have regarding the home buying process and we can discuss your unique situation and what Mortgage program would be best for you.

Vibha Singh

CEO

732-648-1748

NMLS ID 66034

Ambika Singh

Loan Officer

NMLS ID 1541005

Follow Us

2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: [email protected]

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

September 2018 Mortgage Newsletter

Bubble or Stable?
The end of Summer is coming soon as is the end of the 3rd quarter. There is casual chatter of a housing bubble and a Real Estate Market “Shift” on the horizon. Much of this talk is due to lower inventory and higher prices. Home prices are outpacing the rise in wages. This creates concern of housing affordability especially with the increase in interest rates. The second quarter had a GDP growth of 4.1%. This represents the strongest growth since 2014. I feel that the market is healthy and stable as opposed to a bubble.

When Trump’s tax cuts took place 9 months ago, there were many economists who predicted doom and gloom with a negative effect on housing. Luckily that has not happened in New Jersey and most markets throughout the US. Let’s hope it continues to not have a negative impact on housing and the rest of the economy. It remains to be seen how the trade wars will effect the economy. Again, there are many predicting a negative impact.

In our January Newsletter, our 30 Year Fixed Rate was 4.25%. When the rate reached 4.5% with an upward trend, there was fear of rates approaching 5% especially since the Fed had scheduled rate hikes. Even with the increase in the Fed rate, we are back down to 4.25%. This is good news as we head to the end of the 3rd quarter and into the slower 4th quarter.

Currently our rates are the same as July. The trend seems to be for the rates to remain stable with a slight upward or downward possibility. I don’t foresee a sharp increase or decrease. Our rates are consistently as much as .25% less than our competitors. Here are our rates:

Conventional 30 Year Fixed 4.25% APR

Conventional 15 Year Fixed 3.625% 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 July. Here is a historical view of the inventory of different market segments which are an important element of the housing market:

July

Single Family 2016 2017 2018
Year to Date 48,355 42,404 37,633
% Change -6.2% -12.3% -11.3%
Condos/Townhouses 2016 2017 2018
Year to Date 13,085 11,136 9,814
% Change -8.7% -14.9% -11.9%
Adult Communities 2016 2017 2018
Year to Date 2,920 2,433 2,354
% Change -3.9% -16.7% -3.2%
Decreasing inventory can put pressure on prices to go up. If that happens and interest rates increase, there would be a negative impact on affordability. That being said, how much more can inventory decrease?

For those that have been pre-approved by another lender, please be sure to shop since you are not obligated to apply with the lender you are pre-approved with. Although we feel we are more flexible then many of our competitors, most lenders have very similar guidelines for pre-approvals. So if one lender pre-approves you, it is likely that other lenders will do the same. If we have all the information needed, we have a 60 minute pre-approval.

Enjoy the rest of the summer and beginning of Fall!

Vibha Singh

CEO

732-648-1748

NMLS ID 66034

Ambika Singh

Loan Officer

NMLS ID 1541005

Follow Us

2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: [email protected]

Licensed Lender: Licensed by NJ Department of Banking and Insurance
© Montgomery Mortgage Solutions, Inc. All Rights Reserved. NMLS ID 19111

Rates On The Rise
The Feds raised the rates .25% two times this year and it was the seventh rate increase since 2015. 2 more rate increases are forecasted for this year. One of the big concerns for the economy is the increasing budget deficit. That number is going to eclipse 22 Trillion and the Treasury department will be increasing the size of bond auctions in the coming months.

One of the most important economic indicators for Mortgage rates is the 10 Year Treasury Note. Last year there was a budget deficit of $800 Billion. With the continued increase in budget deficit, that puts pressure on Treasury prices and rates can go higher.

Mortgage rates were stable during the month of July. The housing market in New Jersey has been robust and the strength of the economy is a reason for this even with the increase in mortgage rates. New construction is increasing and this is another good sign of a healthy market.

Inventory has been consistently lower and home prices continue to increase. Fortunately, the increases in the state of New Jersey have not been at a fast pace and it looks like we are not in danger of creating a bubble. Again, another sign of a healthy, well balanced market.

Currently our rates are approximately .125% higher than last month. We feel that rates will be stable through the end of the summer. Here are our current rates:

Conventional 30 Year Fixed 4.375% APR
Conventional 15 Year Fixed 3.75% APR
FHA 30 Year Fixed 3.75%
10 Year ARM 4.125%
7 Year ARM 4.0%

Please keep in mind that rates are subject to change based upon market conditions.

The Free Home Buyer Seminar is on hold through the end of September. All attendees receive a $1,000 coupon, a free 125 page workbook and get information regarding the entire life cycle of a Real Estate Transaction. Speakers include a Real Estate Attorney, Credit Reporting Expert, Real Estate Professional, Title Insurance Attorney and Home Inspector. You can see the schedule and details at www.HomeBuyer-Seminar.com

Vibha Singh
CEO
732-648-1748
NMLS ID 66034

Ambika Singh
Loan Officer
NMLS ID 1541005
Follow Us
2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929
Email: [email protected]