Mortgage Rates Edge Higher, NJ Listings Surge: What Buyers Must Know Now

Mortgage rates crept higher again this week, with ARMs seeing a sharp jump 📈, and bond yields flashing warning signs about sticky inflation. Meanwhile, New Jersey real estate is heating up with a big inventory boost — especially in Hudson and Essex Counties! 🏡 In this episode of Mortgage, Markets, and More, Peter D'Angelo dives deep into why rates are stuck, what the Fed's "patience play" means for buyers, and why now could be the perfect storm of opportunity in key NJ markets. 💥

Stay tuned for essential insights on navigating today’s volatile mortgage world and tips on timing your next big move! 🔑

#MortgageRates #HousingMarketUpdate #NewJerseyRealEstate #FedUpdate #InflationNews #BondMarket #HomeBuyingTips #RealEstateInvesting #MarketTrends

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Peter D'Angelo | NMLS: 885309 | Branch Manager | Guaranteed Rate, Inc., NMLS 2611
Peter.DAngelo@Rate.com

*All information, topics, discussion is my own personal opinion and insight, not reflective of Guaranteed Rate, Inc. May contain market information for informational purposes only, not to be used as financial advice.

Transcript

Current Average Rates (via Mortgage News Daily):

• 30-Year Fixed: 6.86% (up from 6.81% last week)
• 15-Year Fixed: 6.19% (up from 6.15% last week)
• 30-Year Jumbo Fixed: 7.00% (up from 6.95% last week)
• 30-Year FHA: 6.25% (up from 6.18% last week)
• 7/6 SOFR ARM: 6.45% (up from 6.35% last week)
• 5/1 SOFR ARM: 6.28% (Bank Rate source; notably up from 6.02% last week)

📈 Trend: Mortgage rates continued a modest climb this past week across all major products. ARMs in particular saw notable increases — the 5/1 SOFR jumped by nearly half a percent, suggesting market sensitivity to short-term interest expectations.

2. Bond Market Update

Current Treasury Yields:

• 10-Year: 4.318% (up from 4.141%)
• 5-Year: 3.918% (up from 3.709%)
• 2-Year: 3.83% (up from 3.588%)

📈 Trend: Yields have risen across the curve, especially at the 10-year point, now nearing recent highs. This movement suggests growing investor concerns about inflation persistence and Treasury supply pressures.

3. The "Why" Behind the Rates

Economic Indicators

• Federal Reserve Policy Update (May 7 Meeting):
   
  • The Fed held rates steady at 4.25%-4.5%.
•  
  • Inflation remains stubbornly above the Fed’s 2% target.
•  
  • New risk identified: tariffs could simultaneously slow growth and fuel inflation — a classic stagflation setup.
•  
• Powell's Commentary:
   
  • Ruled out preemptive rate cuts.
•  
  • Emphasized a "data-dependent" stance, needing more clarity on tariff impacts.
•  
  • Message to markets: "patience is the play," reinforcing a prolonged higher-rate environment unless inflation eases meaningfully.
•  

Market Sentiment

• Pre-Fed Meeting:
   
  • Slight uptick in mortgage rates (30-year fixed peaked around 6.79% on May 7) amid caution over Fed messaging.
•  
• Post-Fed Meeting:
   
  • Minor relief rally in bonds pushed mortgage rates slightly lower (~6.70% by May 8).
•  
• Forecast Uncertainty:
   
  • Analysts expect mortgage rates to stay range-bound between 6.5% to 7% until clarity on tariffs and inflation emerges.
•  
  • Key forward-looking data: Next CPI release, unemployment reports, and signs of any tariff policy adjustments.
•  

4. Regional Spotlight: New Jersey Real Estate

Inventory Surge:

• Statewide: Active listings up 14.57% YoY in March 2025, totaling about 9,000 new listings.
• Hot Markets:
   
  • Hudson County listings up 39.36% YoY.
•  
  • Essex County listings up 21.93% YoY.
•  

Price Trends:

• Median listing price rose modestly by 0.93% MoM, reaching $550,000 statewide.
• Luxury slowdown: Markets like Short Hills and Alpine show softened momentum.

Buyer Behavior:

• High activity in commuter hubs (Hoboken, Montclair) and affordability-driven areas (Newark, Trenton).
• Coastal spots like Asbury Park remain competitive, buoyed by lifestyle demand.

Key Statistic:

• Homes sold 25% faster in March 2025 compared to February — average days on market dropped to 33 days.

5. Key Talking Points for Reflection

• Fed’s Tightrope: Balancing inflation fight with emerging stagflation risks.
• Mortgage Volatility: Rates are extremely sensitive to every new data release — especially CPI, PPI, and tariff updates.
• NJ Buyers' Opportunity: Inventory growth offers slight relief, but affordability is still strained, particularly in desirable commuter towns.
• Luxury Resilience: Despite broader headwinds, premium properties in strategic markets are holding up better than expected.
• Future Indicators: Upcoming inflation and labor market reports could nudge the Fed toward (or away from) a fall 2025 rate cut.

6. Closing Thought

Even as mortgage rates remain stubbornly elevated and bond yields creep higher, opportunities are appearing beneath the surface — especially for prepared buyers in rebounding inventory markets like North Jersey. Meanwhile, the Fed’s "higher for longer" message suggests patience will continue to be a virtue in both real estate and investing.

TRANSCRIPT:

📍  📍    Welcome back to Mortgage Markets and More. I'm your host, Peter D'Angelo from Rate. I hope you're doing well today. We're going to be taking a look at these mortgage rates and what's going on in the market. We're gonna review what the Fed had to say this week, and then we're going to take a look at what's going on with New Jersey in particular, and some housing statistics there.

Maybe a little bit of commentary about what things are going to look like over the next couple weeks if you're out there shopping. So without further ado, let's get into it. Let's talk about where mortgage rates are as of the recording of this podcast episode, the Thursday morning before its release. 

According to mortgage news daily 30 year fixed rate mortgage is averaging 6.86%. The 15 year is averaging 6.19%. The 30 year jumbos averaging 7%. The 30 year FHA is averaging 6.25%. The seven six SOFR adjustable rate mortgage, that's averaging 6.45%, and the five one SOFR arm is averaging 6.2. 8% and that one is according to bankrate.com.

Overall, mortgage rates have elevated a bit compared to where we were last week. I was a little bit more optimistic and then the market did what it did, and here we are. Let's take a look at the bond market because that's showing us  what we could be expecting here in the near term.  10 year treasury yield is at 4.318% this morning.

The five year is 3.918 and the two year is 3.83%. So these yields have all risen proportionally, but still, that 10 year bond jumped up quite a bit. We were at 4.14% last week with our update, and as we can see, 30 year fixed rate. Mortgage is up from the 6.8. 6.79 thereabouts. It was averaging last week and it elevated up a bit.

Why did this happen this week? Well, in the very immediate past we had the Fed with their meeting and their policy announcement. That was completed on Wednesday this week, and essentially they held their benchmark interest rate, the Fed funds rate at 4.25 to 4.5%. The commentary's the important part right now, we've talked before, there wasn't an expectation that the Fed was going to cut their interest rates.

Just doesn't make sense right now because of all the volatility that's occurring and. It's tough to say if there's economic instability because of how the economy's going or if it's driven by the news, the headlines and the speculation that continues to change the narratives back and forth.  The new risk that was identified that Fed chair Jerome Powell mentioned was that the tariffs could stimulate a situation, which is a little bit of a nightmare, where we have slowing growth in the economy that's not good, and inflation goes up.

So that means like people aren't spending money, but the cost of everything goes up. And in that scenario, which would be stoked by tariffs if they're not managed properly, could be. Something that the Fed has to be prepared to manage.  

Number one, they are not going to preemptively cut rates, so what that means for us is we need to see inflation moving downward. And we need to see stability in the job market. Then we'll see the fed cut rates, or if there's some sort of severe negative impact to the economy and the Fed needs to step in to help to stabilize.

Those are the only scenarios right now. So that means they're not gonna be preemptive. Secondly, they reinforce the same thing. We continue to hear they're staying data dependent. That reinforces the first point. They're gonna continue looking at those things, inflation. And the job market.  Lastly, he did say, and this is the quote, they're doing a patience play, so they're going to patiently wait and see how things develop, which means for us, we can expect this elevated interest rate environment for the foreseeable future. 

The market sentiment before the Fed meeting was very volatile. That's why we also saw the interest rates increase. The interest rate increase that we saw week over week was not necessarily a fundamental of the Fed meeting, but more so of how the market was trading and what was going on in the markets over the course of the week between the last episode that we aired and this week. 

The post fed meeting, which is very immediate, just that afternoon, there's only a couple hours of trading. After Fed chair Jerome Powell makes his commentary and it helped move interest rates a little bit lower. So our rates today would've been a little bit higher. So there was a little bit of relief actually from the Fed meeting.

Uh, the forecast here is that most analysts right now, and I. I think I'm in this boat. Most analysts see 6.5% to 7% as our range bound for a 30 year fixed rate mortgage. That's what we've been seeing rather more consistently now. It's still volatile because we've seen big swings quickly. 

We have been staying within that range with just a couple times there where we popped up above 7%. So I think that that's where we're going to be. Everything's going to be very dependent on all of the economic data. So it does not take for the Fed to say anything or do anything for the interest rates to change.

And because we know that the Fed is data dependent.  If there's a good inflation report, people will get very optimistic. We could see lower interest rates. If there's a negative employment report, then we could see better interest rates without the Fed saying or doing anything because we know from the Fed that those are the important things that they see as priorities for themselves.

So the market's going to speculate accordingly based on those things.  Now I wanna move along, talk about New Jersey and what's been going on here because there was a bit of an inventory surge, so state y the active listings are up quite a bit. We're talking about a factor 15 to 18% year over year.

When we're comparing this time to last year, that totals over 9,000 new listings, the hot markets I wanted to highlight today. Number one standout and this information is actually according to the data that we have from March. We're still waiting on April data. So using this, and I can also tell from just driving around and like going to the places I need to go.

I'm definitely seeing more for sale signs. Um, but the hot markets to highlight here, Hudson County listings up 39.36% year over year.  And this is as of March, 2025. Essex County listings are up almost 22% year over year. Quite a bump in inventory the year over year. I always like to highlight devil's in the details.

If it was a rough spring last year, which it was, by the way, if we recall, interest rates went up after January and February. That's when we started to see the hot inflation interest rates went up. So the buyer shopping in that market had to contend with higher interest rates at that time. So listings were down. 

Quite a bit last year, but still this is a good sign. That means that this spring market has already got a bit of a boost compared to what it was looking like last year. Now for the price trends in the state median list price rose up modestly, 0.93% month over month in March to reach around $550,000 statewide.

The luxury market though, did see a slow down, so I'm talking about. Alpine Short hills. Markets like that did see a little bit of a suppression of activity. The buyers out there right now though,  are really focusing on the commuter towns. Those are the most competitive markets. So we're talking about Hoboken, Monclair, even places like Bloomfield Glen Ridge,  pretty much take your pick if there's a accessible and easy NJ transit available.

That's a go-to. So those markets are remaining very competitive. No matter what happens with the inventory, they stay competitive in those markets.  The coastal spots in the state, like down in Asbury Park, long Branch, all of that. They still remain competitive but the buyer pool there, that's more of it being a luxury choice and purchasing for those purposes.

Other than that, I just wanted to highlight a couple other key statistics for you. Number one, home sold 25% faster in March of 2025. And that's compared to February in that. Indicated an average days on market. So a home was listed and then closed and sold in about 33 days.  So the competitive nature is still there, but we're seeing at least one part of the equation is improving.

So, we're looking good there.  Now just a quick summary for you of everything that we have from this update today. First and foremost, the fed, because it's recent, they're walking a tightrope. They're doing the best that they can with the data at hand.

We've highlighted the issues with the data, though it lags, it's not a hundred percent up to date all of the time.  There are revisions. When the revisions happen, that changes people's impressions, but it's always when the data gets first released, that has the biggest impact unless there's something else that occurs.

So this is what the Fed has to manage right now, and that's even putting aside the optics that the Fed has had to contend with as of late. President Trump making comments and kind of throwing shade at Fed Chair Jerome Powell and then walking it back, that's a bad look for the US and that's also a terrible look for investors who are trying to  calculate and figure out and forecast where things are going to go in the next few months.

Secondly, the mortgage volatility. We are going to stay highly dependent on what these data reports are. So if you are a real estate professional or if you're a prospective home buyer or a prospective seller, trying to time it right and find where that budget is.  Think of it this way, anytime you're going to be watching the news, reading the news, and you hear or see any headline about tariffs, about inflation, about the job market.

Understand that there's going to be an impact to mortgage rates and lending always at this point,  and it could be good, could be bad, but just keep that in the back of your mind. That's just a little trick, a little tip for you right now. So how does the rubber meet road for that for you? If you are a prospective buyer or seller, that means just keeping the communication at a high level with your mortgage advisor or reach out to me.

We could stay in touch so that we could stay in the loop on what's going on. Also, these episodes are helpful 'cause we keep our eye on the ball here.  Secondly, rubber meets the road because that can indicate to you. Maybe you can have better confidence moving forward when you see certain things. Because you're getting the context now of what the Fed looks at how the markets are operating. 

This could be beneficial for you. Knowledge is power  as far as the New Jersey buyers. Well, inventory growth is happening not at the level that we need, but the level that we need is incredible. So any progress whatsoever should be celebrated. Maybe because there's actual more opportunity now in the marketplace, now may be a good time.

So again, I'm still staying in this perspective. I've been saying it for a few weeks,  said last week.  Chaotic times create opportunity. This is chaotic right now, but there's opportunity.  So as long as you're feeling comfortable and confident, your personal financial situation should be the number one deciding factor.

Market speculation is market speculation,  luxury, resilience. I want to talk about that space, even though I mentioned that there's been a little bit of suppression, the luxury market in general. Has proven to be resilient over time. So when we look back historically, I wouldn't blow anything outta proportion if we've seen a little bit of a suppression in the luxury real estate market.

And then looking forward, again, inflation, labor market, all of these things are going to be the most important elements to us as we're trying to manage ourselves and our budgets moving forward and understanding what it will take to purchase in this market, what it will take to. Identify the right opportunity and timing for you and your family, or if you're a real estate professional, helping to guide your clients through this time, which I wanted to offer this closing thought to this segment.

 When you're purchasing a home and you're going to live there, it's your primary residence.   If you're going to live in a property as your primary residence, you are not a real estate investor. 

You are investing in real estate though, and I want to just make a clear distinction on that because when you're speculating about where are home prices going to go? What if home prices go down? The only time the value of a home matters to you are in  really two main circumstances, one, when you're selling the home. 

Two,  if you need to leverage that asset for financing,  those are the only two times that that home value is going to mean anything.  And in the first scenario,  when you sell the home,  you have to think about your time horizon.  Think about if you're buying a home as your primary residence, think about how long you think you're gonna be in that property.

Let that start to inform your decision making. If you're concerned about volatility with home prices, or if you think that homes are overvalued right now and that the home values are going to come down,  every time that's happened in the past, there's been a rebound and things have come back, or there's been at least some sort of growth that's occurred.

How long has that rebound taken? We don't know right now, but my point remains this. Use your time horizon to guide your decision making 'cause it's your primary residence. You are making a decision. When you buy a primary residence as your home, you're making a decision to put your money towards something that will build equity as opposed to paying just a home expense.

IE renting.  In the second scenario, if you need to leverage your property for financing, that's when home value will be important to you.  You will be able to manage with whatever values there. If you do need to leverage that, if you need to leverage your home for that.  So in both of those scenarios, I wanted to make that distinction.

Real estate investors are purchasing real estate for the sole purpose of income. Think about it this way, anything that you invest in, you're going to get return on. Whether it's realized return immediately or future gain return, that's investing.  If you're living in that property, your return is there.

There's a component of that, but there's no regular return. You're investing in a property and you're building equity in something.  That is part of the calculus, but I wanted to make a distinction just because I think that'll be helpful. A lot of times I've just noticed over the past couple months trying to manage and speculate on real estate prices is near impossible in this climate right now for the professionals that do it for a living.

So  with that in mind,  I have found that it's been super helpful to focus attention on just your personal finances and. What home ownership means to you, and if you focus on that and you make your decisions based on your personal finances, what you are comfortable with, taking into account the risks and everything that is going to be your highest likelihood of success and your path of least resistance internally.

In my opinion, 'cause you can keep it very clear for yourself. So I hope you found that useful. I'm off the soapbox now, so I hope you found that helpful and useful as well as all of the updates here.

Excited to get you your next update next week. If you have any questions, please feel free to reach out to me. You can find me on socials. At Peter dot Angelo dot rate on Instagram, or you can email me at peter dot dangelo@rate.com. All of my socials are linked below. I'll have some more. Did you know, updates for you coming up next week and the week  📍 following, and we're going to be adjusting our cadence a little bit.

I'm definitely gonna keep giving the did you know for Mortgage Mondays, but those update episodes, midweek,  I want to be providing you with valuable information so. When I have material to share with you there, I will be putting that out on Wednesdays, but for now, you can definitely expect your up market update on Fridays and that mortgage Monday.

In the meantime, have an awesome weekend and take good care.