Update 07/10/2025: New Jersey Housing Market Hits Turning Point—Is a Buyer’s Market Emerging?

This week on The Pulse and Perspective, Pete D’Angelo breaks down New Jersey's shifting real estate dynamics with fresh July data. 🏡 Median home prices are up 5% YoY, but cracks are forming: 1 in 3 homes are now selling below asking, and expired listings are rising fast. Pete explores how buyer fatigue, global uncertainty, and seller mispricing are converging to create new openings for savvy buyers. Plus: mortgage rate trends, refinance insights, and the real-time pulse on adjustable-rate mortgages.

Whether you're a buyer, seller, or agent, this episode arms you with the data and strategy you need to navigate the mid-summer market.

📊 #HousingMarket #NewJerseyRealEstate #MortgageRates #HomeBuyingTips #RealEstateUpdate #ExpiredListings #Refinance

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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

POD_odcast_Update-07.10.2025

 [00:00:00] 

Welcome back to the Pulse and perspective with me, Pete D'Angelo. I hope you're doing well. I am excited to share with you some updates here this week. Some trends are developing here in the state of New Jersey and I. There are some examples that I can share with you from last week's episode regarding that Mansion tax real world examples.

But let's first start off with a quick check at our New Jersey real estate market. As of right now, the most recent data is showing us that average homes are selling in the state of New Jersey for $564,794. That is the median sales price, which is up 5% year over year as of July 4th. 2025. This is showing us that we are still seeing home value appreciation, but that growth rate is about half of what the annual cumulative growth [00:01:00] rate has been over the past three years.

So for perspective, we are seeing a little bit of a softening on our home values. The other component to consider right now is how quickly homes are selling. And as of July, we're seeing that. Pending homes normally come off the market within about 15 days. That's been the average in the state. It's still a brisk market, but it's not as lightning fast as it was just a few months ago, and that could create some more opportunity for buyers, which is welcomed news at this point.

The inventory. As of May, we don't have the data yet from June, but looking back at May, there was 9,508 homes listed for sale. Showing us that that spring market was starting to develop in May, especially after the tariff talk in April, really had people freezing.

So the fact that it's a little bit better than April, and the previous months we're in. Better shape. We'll have to see if that continues when we get the [00:02:00] June data. But the stage is set, so hopefully we'll start to see if there's some more softening happening and some more opportunity being presented to possible buyers in this market.

Right now, a quick look at homes that have been listed for sale that have had price reductions or were sold, believe it or not, under list price. Currently the data is showing us one third of homes in the state of New Jersey have been selling for less than asking. Now that could be a function of a higher list price and then a price reduction.

It may have sold over list. But still lower than where it was originally listed at. So one third of transactions that's showing a softening, and we are now moving to a more balanced market in the state of New Jersey. However, it's hyper localized. So what I will say is there's certain pockets of the state that depending on where you're shopping, you may be able to negotiate on price in other highly desirable and competitive markets.

[00:03:00] Right now we're also seeing an uptick in expired listings. An expired listing is someone who goes to sell their home with a real estate professional, and it's been on the market for however long that listing agreement was established for.

So a real estate professional will say, well, I'll list your home. Here's a contract for three months. I'm going to sell your home in three months. That's how long I'm going to have this listing. At the end of that term, we can renegotiate if you'd like me to continue listing your home if the home hasn't sold yet.

In the state, we're seeing a trend upward of these homes that have expired. So that's also showing us that there's a softening happening, even with the expectations of sellers and how much that they believe that their home could sell for. I've said in the past, I believe that this is us testing the upper limits of the buyer's ability to purchase.

I don't know that it's necessarily a conversation about home values are declining. There is a softening happening. There are in the data, [00:04:00] you can see that home values are going down, and that's because of flooded inventory for a number of different reasons.

In the state of New Jersey, though, these expired listings are showing us that maybe there's a misalignment of expectation from sellers and how much they think that they can sell their home for, possibly improperly listed pricing. That could be a component of it. And then like I mentioned, the past couple months has been a little crazy.

Let's not talk about mortgages for a moment. Let's just look at the news and what most Americans have been inundated with through social media and through the regular mainstream media. Well, in April, it was nothing but tariff talk that continues, and most recently, because of the expiration of the tariffs that had that temporary extension into July.

Now the conversation's resuming again, created volatility. People get anxious, they kind of hold back. Buying a home is one of the largest purchases that you're going to make in your life. If you are feeling [00:05:00] anxious, if there's any part of what's going on with the economy and with geopolitical risks and things happening in the world, you are not going to proceed.

So that's one component. The other thing that happened, we had a little bit of a reprieve in May. We saw there was a little bit of an uptick when we were looking at the data here in New Jersey, but. That was a brief time where we got a breather, and then come June we had the news of the bombing in Iran.

This is something that still affects the psychology of the American consumer, and once war starts to become something you hear and read about, you can't help but feel a little bit anxious. And again, we're not going to take that next step forward with one of the largest financial decisions and commitments that you're going to make in your life.

So these are the things that I think are happening in the periphery that are certainly having an effect here. But now to get local here in New Jersey, in my experience. Because of the [00:06:00] crazy growth rate that most home values have seen in the state, people have that expectation that it's going to continue happening.

So the expectation for what people's equity is in their home and how much their home can sell for has been sliding up. And now that there's a softening occurring, well now we're seeing these expired listings. That's all kind of a full scope, in my opinion, of how this is developing. 

Is affordability. So let's take a look at those mortgage rates that's informing those buyers and would be sellers if they're going to purchase something new after selling what they're going to do and what decision they're going to make. So as of this past week, we saw interest rates actually tick. Up a little bit between the 6.7, 6.85 range, thereabouts.

But within the past 24 hours, we have seen a little bit of improvement on interest rates and there's a little bit more of an expectation happening there. Some of the cause for this was, market [00:07:00] exuberance. Nvidia hit an incredible, I think it's $3 trillion market cap. So, there was a lot of excitement in the stock market and that kind of.

Pulls people in and takes their attention off of inflation jobs, reports expectation for fed rate cuts, and then we're seeing a lower interest rate environment. As I've mentioned, it's volatile. The good news is here we're staying within a particular margin. The other element here that we're talking about with mortgage rates is the fact that refinances are starting to happen too, so people are tapping into their home equity, whether it's through an equity loan or a heloc.

Access some of the equity in their home without selling, be it for. Home improvement purposes, debt consolidation purposes, recuperating savings after performing work on the home. These are all reasons why people would tap into their equity. So that's something that's been on the rise as of late. The average interest rate for that, so [00:08:00] around 7% for those refinances and the equity loans, those are a bit higher.

You can expect something in the 8% range, maybe even in the 7% range, depending on the. The investor or the bank that you're working with. I certainly have seen second mortgages in the 7% range over the past few weeks for families that I'm helping. So there is a little bit more affordability even there as the interest rates have softened.

'cause we have seen one of the best interest rate environments over the past few weeks that we've seen from most of the year going halfway through the year. Now, I wanna also comment on those adjustable rate mortgages. Those are still providing a benefit. The average right now, as of today, 6.16% to 6.2% for a five one adjustable rate mortgage.

That's helpful. I wanna make a comment on that because you can have a lower interest rate as you can see, but you will still have to qualify for what's called the fully index rate and adjustable rate [00:09:00] mortgages. The rate that you have on that is an introductory rate with a prescribed amount of time.

That's the five and five one arm, and then the one is how often it adjusts at the expiration of that introductory rate, and the adjustments are driven by a market indicator. Very commonly, the market indicator is a secured overnight funding rate. And so that's the part that moves, and then your lender applies a margin to that.

So if that's our market indicator, we're tying the interest rate movement to that. Then the, the bank, the lender loan servicer is making a premium on interest. That's a margin above that. Margins typically anywhere from two to 2.5%. Sometimes they're 3%. Depends on the loan program and. The mortgage professional you're working with and the company you're working with.

So as that adjusts, we will qualify you based on what that secured overnight funding rate is with the margin applied as of today to qualify. So you still have to qualify with a higher interest rate [00:10:00] for purposes of calculation for qualification, but the actual effective interest rate and the rate that you'll have on that mortgage for the introductory period.

Is what I've shared with you for the average here, that around 6.16% range. Now, that's also not considering if you wanted to pay discount points, which you can do in any of these scenarios. And I have been seeing interest rates in the fives, mid fives, even in some cases in some, credit profiles and different loan.

Borrower profiles seeing 5.5 to 5.75% with the inclusion of discount points, paying a premium to lower that introductory rate. So there is a little bit more affordability and it's stabilizing affordability. So with this stabilization on interest rates that we've been seeing as of late, pairing that now with the information we're seeing in the state of New Jersey with a softening happening on home value appreciation, we.

I think can confidently say we have now [00:11:00] tested the upper limits of how far the bar, borrower, and buyer will go to purchase a home. So now that's why we're seeing that starting to taper off. The next step in this logically is if home value appreciation is softening, well then that means it will continue to soften until it starts to flatten.

The way that that flattens is by the market shifting from seller. To buyer. Let's take a look at the national market because that's going to clue us into what's going on. The housing market is shifting back to pre pandemic norms with a cadence of business and how homes are selling comparable to around 2019.

The national inventory is over a million homes. That's the most since, and that's as of May. 2025, uh, and the national average right now is 4.4 months of supply. That is the highest since 2019. So we are seeing pre pandemic levels when we're looking nationally. As we talked about in the top of the episode, new Jersey's a little bit of an [00:12:00] outlier, and there are markets that are outliers.

Places like the New York Metro area, which New Jersey's part of. The Chicago Metro area. These are two particular markets that are outliers that aren't necessarily following this trend, that still have a very quick market and still have consistent home value appreciation. Other areas though, are showing signs of home value decreases.

So places like Austin and Denver, as of the most recent data that we have, we're seeing those home values start to soften. These could be little signs of what will start to permeate. In the more competitive markets, how long that takes, or if it 100% absorbs into these markets in the same way, time will only tell, and there's a, there's part of it that is based upon the desirability of those markets.

If the desirability remains high, we're gonna see home values kind of flatten out and kind of just test the top, which they've done and then stabilize.

Many homes across the [00:13:00] country are selling for below asking price. In New Jersey, it's a one third that's happening more commonly throughout the rest of the country right now, so there's softening happening. That could be a bellwether for us in the more competitive markets. So some key takeaways here for today.

Home values in New Jersey are still on the incline, not at the breakneck speed that the past three years has indicated, but there is still home value appreciation. Interest rates are staying within a margin, even though we are seeing a little volatility. We're staying within a particular margin that's going to help us and will help you as it would be home buyer because you have a good sense of what to expect if you're going to shop and if you're going to have an offer accepted what your interest rate is going to look like.

Seller adjustments in this market are something that is required, whether that's price reductions, whether that's incentives from sellers, for buyers to entice buyers to come to the property place an offer. That's all [00:14:00] part of this conversation now as well. I hope you found this information helpful and useful.

I'm looking forward to providing you a part two 'cause there's some other things that I wanna deep dive into that are updates from this week, but I didn't wanna inundate today's episode, so I hope you found this helpful. Please feel free to reach out to me if there's anything you'd like me to do a deep dive on, or if there's any information that would be beneficial for you as a would be seller, buyer, or real estate professional.

Feel free to reach out anytime. My email address is peter dot dangelo@re.com. Otherwise, I'll look forward to getting you that next episode soon. In the meantime, have a great rest of your week and take good care.