September 2018 Mortgage Newsletter

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:


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



NMLS ID 66034

Ambika Singh

Loan Officer

NMLS ID 1541005

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