December Mortgage Newsletter

New Loan Limits
The Federal Housing Finance Agency (FHFA) recently announced the 2020 Conforming Loan Limits. We have started taking applications for closings in 2020 in accordance with the new loan limits. The new loan limits are very significant in New Jersey since there are many “high cost” areas in New Jersey including counties such as Somerset, Morris, Union, Middlesex, Essex and Bergen Counties.

Conforming Limits High-Cost Area
1 Unit $510,400 $765,600
2 Units $653,550 $980,325
3 Units $789,950 $1,184,925
4 Units $981,700 $1,472,550

Loan amounts in excess of the Conforming Limits are considered Jumbo mortgages and the rates are usually higher. In “High-cost” areas, there is another category that is commonly referred to as a “High Balance” or “Super Conforming” loan. High Balance Mortgages usually have a slightly higher rate then conforming rates and lower Jumbo rates.

Inflation Concerns
There seems to be concern that the GDP is not growing fast enough and this could result in a recession. Fed Chairman Jerome Powell stated that the Central Bank was committed to a 2% Inflation. This would indicate that there are no plans to raise rates in the near future. Despite three rate cuts in the past four months, growth has been significantly below 2%.

Current Rates:
Our rates are exactly the same as stated on our last Newsletter.
30 Year Fixed Rate: 3.375%
FHA 30 Year Fixed: 2.75%
15 Year Fixed Rate: 2.875%
7 Year ARM: 3.25%
10 Year ARM: 3.375%

Fannie Mae is forecasting rate stability and a possibility of lower rates expected in 2020. Perhaps we will see rates lower the 3% for the 30 year fixed.
NJ State Real Estate Trends:
The New Jersey Association of Realtors recently released reports for October. Lets take a look at New Jersey numbers:
YTD 2018 YTD 2019 % Change
New Listings: 162,023 161,098 -0.6%
Closed Sales: 100,503 103,776 +3.3%
Median Sales Price: $295,000 $310,000 +5.1%
Avg Sales Price: $371,187 $382,419 +3.0%
Days on Market 64 64 0.0%
Affordability Index 126 133 +5.6%
Certainly a well balanced market. Doesn’t appear to be a bubble in New Jersey.

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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
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