December Mortgage Newsletter

December Mortgage
Rates Stable
The Fed will be meeting this month and consensus is that there will be an
increase of .25% to the Discount rate. This will have a direct impact on the
prime rate. Commercial loan borrowers that have rates indexed to prime will see
an increase in payment. Many home equity loans are also pegged to prime and
those rates will also adjust upward. Some economists are suggesting that there
is no need to continue with the quarterly Fed rate increases.
The past few weeks have been good for Mortgage rates. The 10 Year Treasury
Note yield is a good indicator for mortgage rates and the 10 Year note yield
receded to below 3% for the first time in a long time. In fact, the 10 Year note
yield had exceeded 3.25% recently. A decrease of .25% is very significant.
Lower rates will have a positive effect on affordability. The affordability was
going in the wrong direction so its nice to see that number turning around as we
head into the final month of the year. Perhaps this will give positive momentum
for the upcoming spring market.
The stock market had a setback in October and fortunately this did not translate
to a negative for the Real Estate market. Unemployment has been under 4% for
the last 3 months and for 4 of the last 5 months. This is good for all industries
including those associated with Real Estate. Homebuilder confidence continues
to be stable and that is important for new housing starts.
All our rates our down .125% from last month. Here are our rates:
Conventional 30 Year Fixed 4.5% APR
Conventional 15 Year Fixed 3.875% APR
FHA 30 Year Fixed 4.0%
10 Year ARM 4.125%
7 Year ARM 4.0%
The New Jersey Association of Realtors released its report for Real Estate
activity in the state of New Jersey for the Month of October. Here are some year
to date (YTD)
New Jersey YTD 2017 YTD 2018 % Change
New Listings 160,134 160,612 +1.5%
Pending Sales 101,581 101,983 +0.4%
Closed Sales 97,954 97,804 -0.2%
Median Sales Price $280,000 $292,000 +4.3%
Average Sales Price $359,845 $370,044 +2.8%
Days on Market 71 64 -9.9%
Affordability Index 154 140 -10.3%
The affordability number continues to stick out. Year to date through September,
the Index was at 140. That number has stabilized and perhaps it will get better
due to modestly lower mortgage rates.
Happy Holidays!
Vibha Singh
NMLS ID 66034
Follow Us
2230 Route 206 Belle Mead, NJ 08502
Phone: (908) 359-2410 Rate Hot Line: (908) 420-3655 Fax: (908) 359-3929