From the Record:
As if being a first-time home buyer in New Jersey weren’t difficult enough, we can now add low market inventory and high mortgage rates into the mix.
As of this week, the current rates in New Jersey are 7.55% for a 30-year fixed mortgage, according to Bankrate. That’s just below the national average rate of 7.63%. This time last year, the average 30-year fixed mortgage rate was 5.55%.
“Interest rates are staying up, so that’s making people maybe who thought about moving go, ‘Well, I know I can sell my house now, but I don’t want to pay seven and a half percent’ on a mortgage for my next home,” whereas “maybe I’m currently paying three or four percent on my mortgage” for my current home, said Jenn Vongas, a real estate agent with Coldwell Banker Realty in Morris County.
Because of this, New Jersey’s housing inventory has declined 23% over the past 12 months, with 11,404 new listings in July 2022 versus just 8,732 new listings in July 2023.
Between the limited inventory pushing housing prices up and those rising mortgage rates, first-time buyers are being further discouraged from entering the housing market.
“It’s not that there is no inventory, but it’s moving fast,” said Ghada Abbasi, a real estate agent for Coldwell Banker Realty in Bergen County. “So we cannot catch up with the demand.”
Abbasi said first-time buyers are often getting beaten out by individuals with higher purchasing power. Offers made by these buyers are more frequently chosen over offers from first-time buyers simply because they are able to do things like make larger down payments and put in offers over the original asking price, as well as pay in cash.
“The demand is there for the premier buyer, I should say. The buyers who will meet the income requirements, who have the cash,” she said. “Whenever something comes up, they jump on it, overpay for it, and get it.”