Home Prices, Mortgage Rates, & Millennials
August 27, 2018 | Dwell JC
Home prices in Jersey City are holding steady, despite increasing supply. Demand in most categories remains strong and mortgage rates have dropped slightly in August. Over the past several weeks we have seen slight declines in mortgage rates, which is improving affordability to some extent and may further increase demand. The average 30-year fixed-rate mortgage for loans with 20 percent down payments decreased to 4.8%.
I am seeing the highest demand from millennials looking to make the transition from renting to buying a condo. In fact, many of the condo buyers I’m working with in Downtown Jersey City are currently renting. Although most have dual incomes of over $100,000 each/year, the majority have been unable to save for a down payment, so they often turn to their family for the down payment.
The shortage of housing supply has increased demand, especially among millennials, who have reached the home buying age. Instead of building additional homes to meet this demand, home builders are holding their buildings for rental units. At the same time, thousands of single-family homes in Jersey City have been purchased by REITs and investors, who have converted them into rentals, further reducing the housing stock for sale.
According to Aaron Terrazas, a senior economist at Zillow, “The [national] housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds maybe starting to shift ever-so-slightly. A rising share of on market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsize price gains in recent years.”
I would agree that here in Jersey City we have also begun to see signs that the seller’s market is weakening but only “ever-so-slightly”.
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This report was prepared by Tom Gibbons, a licensed Real Estate Agent and Realtor-Associate with Warren G Curtin Realty, Inc. Email at firstname.lastname@example.org or call/text at 917.593.4836