Weekly Real Estate Monitor for Jan. 6-10
Lukasz Kukwa
Real Estate Advisor at Lukasz Kukwa Real Estate brokered by eXp Realty — Lic. #: 1540143
Earlier today, the jobs report was released which revealed that the job market remains robust, with a net gain of 256,000 jobs in December, bringing the total job growth for the year to 2.2 million. The unemployment rate edged down to 4.1%, and wages grew by 3.9%, outpacing the inflation rate of 2.7%. While this strong economic performance is encouraging, it has temporarily placed upward pressure on interest rates.
Higher interest rates at 7.24% today?currently stem from lingering inflation, which has yet to be fully contained. However, factors such as increased production and improved productivity could help ease inflation and, in turn, bring rates down over time. Additionally, the oversupply in the apartment sector suggests that inflation may moderate in the future.?In the meantime, elevated mortgage rates persist, but an increase in available inventory has sparked gains in home sales across various markets, offering buyers more options despite the challenging rate environment.
Net Domestic Migration and Its Impact on New Jersey
Net domestic migration measures the balance between the number of people moving into a state (in-migration) and those moving out (out-migration). It excludes births, deaths, and international migration, focusing solely on domestic population shifts within the U.S.
Key States for Migration Between July 2023 and July 2024:
With a net domestic migration loss of 35,554, New Jersey ranks fourth among states with the most significant outflows. These losses reflect broader challenges, including housing affordability, high property taxes, and shifts in work and lifestyle preferences post-pandemic.
Migration patterns can shift local housing market dynamics, influencing supply-demand balance and pricing trends. For New Jersey, the continued outmigration underscores potential softness in local demand, particularly if affordability challenges persist. However, this also offers opportunities for local buyers who may find increased leverage in negotiating home prices.
Understanding migration trends is vital for anticipating shifts in market conditions and addressing the housing and lifestyle preferences of current and prospective residents.
Mortgage Rate Trends and Borrower Dynamics in 2025?
As of Q3 2024, 73.3% of U.S. mortgage borrowers held interest rates below 5.0%, a notable decrease from the 85.5% recorded in Q1 2022, according to the?Federal Housing Finance Agency?(FHFA). This represents a 12.2 percentage-point decline, reflecting the sustained impact of higher borrowing costs since 2022.
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Before the surge in rates, most borrowers enjoyed historically low mortgage rates. However, as rates have remained elevated—commonly in the 6% and 7% range—the proportion of borrowers with higher-rate mortgages has risen significantly. In Q3 2024, 17.2% of outstanding mortgages carried rates at or above 6.0%, up sharply from just 7.5% in Q3 2022.?The share of borrowers with rates at or above 6.0% steadily declined from 29.0% in 2013 to just 7.5% by Q3 2022. Since then, this trend has reversed as rising rates pushed the share back to 17.2% in Q3 2024.
Opportunities for Refinancing
Despite elevated rates, periodic rate dips present refinancing opportunities. For instance, a brief drop to 6.11% in September 2024 spurred some borrowers to refinance, seeking relief from higher payments.?The average 30-year fixed mortgage rate kicked off 2025 at 7.07%, the highest January reading in over a decade. Comparatively:
Among 14 forecasts, the consensus expects rates to end 2025 around 6.34%. However, economic uncertainties—including the lingering effects of COVID-19-related interventions—make forecasting particularly challenging.
This evolving mortgage landscape underscores the importance of monitoring rate movements and market opportunities for potential refinancing or new borrowing strategies.
Weekly Highlights:
Fewer New Listings to Start the Year.
Activity dropped by 11.0%, marking the lowest level of new listings in five years. Early January typically sees reduced market activity, but this year’s levels are particularly subdued.
Buyer Activity Slow to Start the Year.?
There was?a 6.3% decline year-over-year as showing activity also fell, with a 12.6% decrease compared to the same week last year. Both contracts and showings reached their lowest levels in five years.
List Prices Still?Rising.
Despite the slowdown in activity, list prices continued to rise. The median list price saw a 6.6% increase from last year. Additionally, all?regional markets experienced price growth as well, except for the Washington, D.C. metro area, where prices remained flat or declined slightly.