From the Otteau Group:
HOME SALES POST WEAK JANUARY
The pace of New Jersey home sales sank to a 4 year low in January raising serious questions about what’s ahead for the Spring housing market. Adding to the uncertainty are concerns about rising oil prices, warning signs that a full blown economic recession may be approaching and the sudden reversal of mortgage rate trends which are now rising despite recent rate cuts by the Federal Reserve. According to Freddie Mac’s latest Primary Mortgage Market Survey® (PMMS®), the 30-year fixed-rate mortgage averaged 6.04 percent for the week ending February 21, 2008, up from 5.72 percent one week earlier and from 5.48% on January 24th. These increases make housing more expensive to home buyers and weaken housing affordability leading into the Spring selling season.
Also in January the number of homes for sale increased for the first time since August signaling that Unsold Inventory will likely rise further as Spring approaches. All of this adds up to a challenged housing market that has yet to bottom out and begin a recovery.