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Mortgage rates in New Jersey and nationwide have leveled off a bit over the past few weeks, and that trend could continue into 2019. Home prices, on the other hand, continue to climb in most of the state. Those are just two of the trends and forecasts that we are monitoring. Here’s an updated look at housing trends for New Jersey, with an outlook stretching into 2019.

Mortgage Rates Settle in the 5% Range for Now

Last week, Freddie Mac reported the results of its latest survey of the mortgage industry. According to that report, the average rate for a 30-year fixed home loan was 4.94%. That was roughly 1% higher than the first week of 2018. So rates have risen a bit since the start of this year.

Looking forward, housing analysts and economists are predicting that mortgage rates could hover within their current range for a while.

For example, the economic research team at Freddie Mac recently predicted that 30-year home loan rates would average 5.1% during 2019. The Mortgage Bankers Association (an industry group) issued a nearly identical forecast in October, suggesting that rates would hover in the low 5% range throughout next year.

Note: The trends and forecasts mentioned above pertain to industry-wide averages. The actual interest rate assigned to home loans can vary due to a number of factors (the type of mortgage loan being used, the borrower’s qualifications, etc.). Please contact us if you would like a ...

A recent report revealed the average credit score among home buyers in New Jersey and nationwide. The average score for borrowers using an FHA loan has dropped slightly over the last few years, while the average for conventional mortgage loans has remained somewhat consistent.

The report also showed a significant increase in the average debt-to-income ratio among borrowers. This means that people are qualifying for mortgage loans with a higher level of debt today, compared to in the past.

Average Credit Scores for FHA Loans

In October 2018, the property information company CoreLogic released a report that showed the average credit score among home buyers in New Jersey and the rest of the nation. The report also highlighted trends relating to debt-to-income and loan-to-value ratios among borrowers.

One of the most noteworthy findings has to do with FHA loans and credit scores. According to the October report, the average credit score among home buyers using an FHA-insured mortgage has declined steadily since 2011.

During the second quarter of 2011, home buyers who used that government-backed mortgage program had an average credit score of 709. But by the second quarter or 2018, that average had dropped to 681 — an overall decline of 28 points.

(Note: The widely used FICO credit-scoring model runs from 300 to 850, with a higher number being better. Borrowers with higher scores tend to have an easier time qualifying for loans, and ...

Federal Housing Administration (FHA) home loans are a popular financing path among New Jersey home buyers. In fact, data collected during 2017 revealed that FHA-insured mortgage loans accounted for nearly 30% of all home purchase loans in New Jersey.

That put the FHA program in second place behind conventional or “regular” loans, which were the most popular type of mortgage in New Jersey last year.

FHA and Conventional Loan Market Share in New Jersey

The Urban Institute, a housing and economic research group based in the nation’s capital, created an interactive map tool that shows the market share of different mortgage programs. It offers results for the nation as a whole, as well as the individual states.

We used this tool to figure out the percentage of New Jersey home buyers who use FHA versus conventional loans when purchasing a property. As it turns out, conventional mortgage loans still reign supreme.

Here are the market-share percentages for loan programs used last year:

  • Conventional, 65.4% of home buyers
  • FHA, 29.2%
  • VA, 4.3%

That adds up to 98.9% by the way. Special mortgage financing programs, such as the USDA loan designed for rural borrowers, likely made up the remaining 1.1% of loan volume.

Note: These figures are for 2017. The finalized numbers for 2018 were not available at the time this article was published.

Difference Between the Mortgage ...

A recent housing industry report revealed some interesting trends about single female and male home buyers in New Jersey and nationwide. The number of single females buying homes has risen over the years and now exceeds the purchases made by single males.

Married couples still account for the majority of home buying activity in New Jersey and elsewhere across the country.

Survey Statistics for Single Female Home Buyers

Earlier this year, the research department from the National Association of REALTORS® (NAR) published its “Home Buyer and Seller Generational Trends Report” for 2018. This detailed report was the result of a 131-question survey mailed out to 145,800 people who had recently purchased a home.

Among other things, the NAR survey showed that:

“Sixty-five percent of recent buyers were married couples, 18 percent were single females, seven percent were single males, and eight percent were unmarried couples.”

Beatrice de Jong, the Director of Residential Sales at Open Listings, offered some background on these trends for an August 2018 article she wrote for Forbes. She attributed the rise of the single female home buyer to a change in outlook as well as financial circumstances:

“Single women are opting for mortgages before marriages. Modern women accept they have more to offer beyond their traditional domestic roles, and not everyone is ready to be a wife or a mother yet … ...

A fresh round of housing forecasts suggest that home prices in the state of New Jersey could rise faster than the national average in 2019. In some cities (such as Newark, Jersey City and Paterson), home prices are predicted to rise by double digits over the next 12 months or so. These forecasts come from the economic research team at Zillow.

Strong Home-Price Forecasts for New Jersey Cities

Home prices in most New Jersey towns and cities have risen steadily over the last few years. The same goes for most cities across the U.S.

Recent forecasts point to a continuation of this trend. In fact, one set of predictions suggest that many New Jersey cities could far exceed the national average for home-price appreciation over the next year.

In October, the housing analysts and economists at Zillow issued some new projections for home prices in New Jersey. By their estimation, the median home value for the state could rise by around 7.1% over the next 12 months (ending in October 2019). That’s higher than the actual recorded gains of the previous 12 months. It’s also higher than the national forecast for the next year.

But when you drill down to the municipal level, the home-price forecasts are even stronger. For some cities and towns in New Jersey, the company has predicted double-digit home price gains between now and fall of 2019.

Here are some examples:

Newark: The team of analysts predicted that the median home value ...

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