Update 07/24/2025: Mortgage Rates Steady, But Is New Jersey Headed for a Buyer’s Market?

This week on The Pulse and Perspective, Pete D’Angelo breaks down the latest New Jersey mortgage and housing data—and it’s all about balance. Are we finally seeing cracks in the long-standing seller’s market? With inventory barely ticking up and rates holding firm between 6.78%–6.85%, buyers may find new negotiating power in some towns across the Garden State. Pete also zooms out to cover national trends: builders are cutting prices, expired listings are on the rise, and 22 straight weeks of mortgage app growth tell a story of buyer demand that just won’t quit.

Plus, what’s next for interest rates with the Fed meeting approaching? And why today’s “stable” rates may be the calm before the policy storm. If you’re watching for market softening—or wondering if the window to sell is closing—this episode is for you.

#realestate #housingmarket #mortgageupdate #NJrealestate #homebuyingtips #interestrates #fedwatch #mortgagetrends

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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

Podcast_UPDATE07.24.2025

 [00:00:00] 

Welcome back to the Pulse and Perspective. I am your host, Pete D'Angelo. I hope you're doing well here with your weekly mortgage and real estate update. Today we're gonna take a look at New Jersey mortgage interest rates. Maybe get a sense of where they could be going here in the next week or two, and then take a look at the National Movement for real estate and give us some comparison to see how we're stacking up in New Jersey compared to how things seem to be moving throughout the rest of the country.

So starting off here in New Jersey last week we talked about the median home sale price in the state. That's around 600,000 and it bears repeating 'cause that's 7.1% up year over year. That is now starting to move us toward the direction of that 10% cumulative annual growth rate. Again, although I believe we're probably going to see the home value appreciation component remain at this level.

The other thing to [00:01:00] consider about New Jersey right now is the inventory. So taking a look at the inventory, it's flat week over week.

About 0.2% more inventory hit the market over the past seven days. That's not much. So that doesn't mean that there's a lot more opportunity happening, but the fact that there's more inventory happening, even though it's flat week over week, that's important because we haven't seen things like this.

Routinely over the past few years, and that's what's driven up demand and prices compared to last year. Slightly more listings. So that means there's more opportunity for buyers out there. There's also some steady days on market that we're seeing, so homes are staying for a consistent amount of time.

This is kind of pointing us to the fact that there's a little bit more balance happening in the market as opposed to it being exclusively a seller's market like we've been seeing for the past few years. Sellers still [00:02:00] retain this leverage though, so let's not make any mistake. They still have a lot of the power in the transaction, but there is more opportunity for buyers right now, which is moving the needle and.

The market is hyper localized in the state of New Jersey right now. So though we're looking at the trends throughout the state, when you start going into certain counties and townships, it could be very different. You can have certain towns right now and certain market areas in the state of New Jersey that are going.

Into a more balanced market, which means it's not a seller's market, nor is it a buyer's market. It is a balanced market, and this is the trajectory of how we could possibly see things move to a buyer's market. Although I would temper your expectations tremendously for that because there is so much pent up demand.

When it comes to understanding who's looking to buy and understanding what demand is, well, we have something that can clue us into that. We have mortgage applications [00:03:00] when we see the mortgage applications go up, which we'll talk about in a few minutes.

But when we see that we know there's people interested in buying, so there's some gauge of interest, gauge of demand, what we don't have a gauge for right now. Well, the people who own homes shackled by their sub 5% interest rates, and they don't wanna move and suffer a higher interest rate in a higher payment, but maybe their scenarios are dictating otherwise eventually, and it's this game of attrition.

We have no way of knowing how much activity's going to happen when those sellers decide I'm gonna sell and they become buyers in the market. So we're seeing things balance out a little bit more, we really don't have a good gauge as to what it's gonna look like when the sellers start listing their homes in higher volumes in the state of New Jersey.

I don't think it's going to happen where floodgates are going to open, but I think [00:04:00] it will be, more competition for buyers at some point. We'll have to see. Stay tuned. I'll keep you posted on this as it develops, which may be this year. Although my gut is telling me it's likely going to be next year that we're going to, if there's going to be any big movements and changes in the industries, we'll probably see that next year.

Mainly due to the fact that this year there's still a lot of conversation about tariffs, about uncertainty in the economy, although by many metrics, the economy's doing very well, and it doesn't feel like that for most American consumers right now. But when we look at the stock market, we look at the equity market, it's doing pretty well.

So we'll have to see how this develops over time. Next, we're gonna move on to the mortgage interest rates. What's going on here? 30 year fixed rate mortgage is averaging around 6.78% to 6.85%. That's, we did an up and down over the [00:05:00] past week.

They did go up and over the past 48 hours we've been seeing improvement on interest rates. So that's good news. We are staying range bound, if you recall, every week for the past, I wanna say. Seven weeks now, maybe even longer than that. We've been staying within a very particular range. This is super helpful.

We can manage our expectations and we can manage our budgets much better when the variable of the interest rate is not swinging low and high. This is helpful for anyone who's a buyer out there. Next we got the 15 year mortgage rate that's averaging around 6.05%, and then the five one arm, we're down below 6%.

5.88 is the average that likely is including discount points, and that's also something I always like to remind you of when it comes to these interest rates. When we talk about averages, it's not capturing whether or not people are paying a premium discount points to have the lower interest rate. This is just the average rates that are being offered.

[00:06:00] Why did. Why was there a little bit of movement as far as the interest rates are concerned over the past week? That's what we talked about last Thursday. The CPI report inflation that came in 2.7%, a little hotter, and the market reacted. So we saw interest rates negatively react because it took away expectations of fed rate cuts.

The Fed said they're not gonna cut until they see improvement on inflation in a stable labor market. If inflate that inflation component went up a little bit, they're gonna hold steady. Their next meeting is coming up on July 31st. Expectations are zero for a rate cut. Right now. The market is expecting, well, the half of the market, 50 50 split right now on a September rate cut, which would be helpful.

I would stimulate things a little bit, but then again, I always like to remind everyone. In the past, just recent past, the Fed cut their interest rate by one whole percent and interest rates went [00:07:00] up. So the Fed lowering their interest rate is, it is not a guarantee that we will see lower interest rates, but maybe that was an anomaly.

Maybe when the Fed cuts the rate, again, it's going to be about their language. It's gonna be about what they say about the future and about future rate cuts and a terminal interest rate, a terminal fed fund rate that. What the terminal rate is, what they are setting as their goal. And they see, oh, well, for a healthy, balanced economy, the way that the economy's moving right now, the Fed fund rate should terminally land somewhere around two point a half percent, 3.5% for reference.

We're at a 4.5% right now on the Fed fund rate. So that kind of commentary will move the needle. Especially as we are trying to find out when are we going to reach a point where the market will be the market and it won't be so heavily dependent on the Fed, and for that to happen, inflation needs to be managed.

It's a little bit of an order of operations [00:08:00] situation. Also, something that's to note is we are still below norm. We are still below average for mortgage rates. We had a sampling for about a decade and a half of a very different time. I sound like a brokered record. I know, and I'm sorry, but it's important for us to put this into perspective.

The thing that makes this a little bit more difficult to digest is the fact that the home values have gone up so incredibly high, but as long as people are still purchasing. I wanna remind everybody what value is. If you look up value in a dictionary, value is what someone is willing to pay for something that's value.

If people have the means to pay and they pay it, boom. There's value when people are still buying homes at these prices. Then the prices will [00:09:00] remain if we look at the rest of the country, which let's dive into that right now. Let's go and take a look at the national real estate market Trends. Because the interest rates have not been prohibitive enough here in the state of New Jersey, but we're starting to see that change throughout the country.

We've talked about this over the past couple weeks. Right now we've had 22 straight weeks of rising mortgage applications. That's telling us those are buyers that are about to enter the market or buyers that are now in the market. So the demand is remaining elevated the supply side is low.

The demand continues to grow. Prices will go up to meet. That balance. Now looking at the rest of the country, that is changing. Despite the higher interest rates, people are still showing up to buy, but in other markets when there's more inventory, the homes aren't selling and there's price reductions, there's actual negotiations happening.

Another thing to make note of when it [00:10:00] comes to different markets. Again, this is going to be different from New Jersey because we are limited by space. We are a rather congested state in most pockets and areas. So development and developers, new Jersey's not very popular for that. By and large. I'm painting with a broad stroke by and large, New Jersey has limited space, but we go out to the rest of the country.

There's a lot more opportunities. The builders that are building in other states right now are offering incentives like. They kick in to help reduce the interest rate for prospective buyers. On average right now, that's about a half a percent. So we were talking about the average 30 year fixed rate mortgage being around 6.78%.

That means that 6.28% is the interest rate being offered for people purchasing homes that are. Builder homes, new construction. And how that happens, the builder provides [00:11:00] a credit back to the buyer that goes exclusively to buying the interest rate down, and that's the mechanics of how that works. So that's one incentive that they're starting to implement to entice buyers.

Second thing, they are starting to reduce the pricing. The pricing is being reduced to stay competitive so they can move these properties. I think 37% of builders based on the latest data, 37% of builders are cutting prices to their homes. So in other states and throughout the rest of the country, the market has changed categorically.

Speaking of the price reductions in the new construction space, that's not exclusive to new construction. There's also price reductions that are happening for listings currently across the country. One third of properties have reduced pricing for listings. We did talk about that last week. 

Expired listings are also another component of this, this an expired listing is when a home is listed for sale for a certain amount of time and then it comes off the market 'cause no one [00:12:00] bought it.

Those numbers are going up. So across the country, the market dynamics are changing, competitive markets are staying the same. And then within those competitive markets, you see that same localization effect is what I'll call it, where we're looking at the whole country. A lot of the country is moving towards a buyer's market with exceptions in pockets like the New York Metro area, Boston, Chicago, these market areas.

But then within those market areas, the same kind of dynamic is happening. Even though it's primarily, let's say, a seller's market. There's pockets where it's balancing out. These trends are going to continue to change, and as long as interest rates stay stable, right? If they stay stable and we stay range bound, it's very likely we're going to start to see some more softening happening.

I believe firmly in the fact that we have now tested the upper limits of what people will pay for our home. I think we're there now. The rest of the country's telling us that in the state of New Jersey time will tell us [00:13:00] that, but we've already seen this across the rest of the state. So what are some takeaways here?

Some advice first. Things subject to change, but there is a lot of change that's happening right now, particularly across the country. We're gonna see if that develops in the state of New Jersey. We're staying range bound on mortgage rates. That's helpful. Stability equals setting proper expectations.

That's great. And then lastly, keep perspective. The market seems to be stabilizing right now, not crashing, so. Don't get worked up by headlines that say that real estate prices are going down. If you are thinking about selling. Talk to a real estate professional, have that conversation right now, at least to get a frame of reference.

It's really important. The ship may have sailed in certain markets where you would get your top dollar in recent time, as if the market is stabilizing and it's shifting, you may not be able to get as much as you were expecting. A lot of times these expired listings are for two reasons, [00:14:00] number one. Not priced properly, homes priced too high, whatever it may be, or property wasn't marketed properly.

In either case, this is what creates an expired listing. So consult your real estate professional. Trust their advice, trust their advice on how to price, and what the strategy would be for marketing and pricing your home. That's it for today. I hope you found this information helpful and useful. I will have a, did you know episode coming out next week?

Where we're gonna talk about down payment percentages and otherwise, I'll have your next week's update on Thursday. Until then, I hope you all have a wonderful weekend and take good care.