The Spring Market Is Now!
The severe shortage of homes for sale is upending the sales calendar for the housing market. Spring has historically been the busiest buying season, but as competition for homes increases, we are finding that buyers are coming out earlier and earlier. January is the new April and the usual spring market is now.
Historical numbers tell the story. From 2015 through 2018, the peak month for average views per listing on Realtor.com was April. January lagged by a full 16 percent. Now, however, January is now the busiest month for many of the largest metropolitan areas. And this trend is expected to continue. According to Realtor.com senior economist George Ratiu, “With housing inventory across the U.S. expected to reach record lows in 2020, we expect to see this trend continue into the new year.”
And we can see this locally. As stated above, inventory is low with demand outstripping the supply of homes. At the end of 2019, Bridgewater had a 2.68 month’s supply, Hillsborough 2.42 month’s supply and Branchburg 4.67. A market is considered neutral, not favoring buyers or sellers, at 6 month’s supply. So you can quickly see the issue. Coupled with low interest rates (see below), buyers are afraid of missing out on what is available, and/or the low interest rates on mortgages. To get a jump on competition, they are now searching earlier.
With even snow on the ground, the Spring market is blooming now.
Mortgage Rate Update
Mortgage rates are mostly holding steady at their lowest levels in months, according to Freddie Mac. The average for a 30-year fixed-rate mortgage is currently 3.65 percent, with an average of 0.7 points, up just a fraction from 3.64 percent a week ago.
This time last year, the benchmark mortgage rate sat at an average of 4.45 percent, more than three-quarters of a point higher than today’s level. Following the recent drama with Iran, investors began putting their money into safe-haven investments like U.S. Treasury bonds. As a result, prices of bonds went up, their yields (interest rates) down, and mortgage rates dropped along with them. Even with the announcement of a new U.S. trade deal with China, yields have barely recovered. Many of the tariffs are still in place, and the situation has not improved much for investors. Minimal change is expected over the next several months.
New Role In Bridgewater
As many of you may know, I have been on the Board of Adjustment for Bridgewater for the past 6 years. Prior I was Chairman of the Planning Board (2004-2011). As of this month, I have been asked to once again assume the role of Chairman of the Township’s Planning Board. Bridgewater is facing new challenges in balancing economic growth with the quality of life residents deserve, and I look forward to meeting this challenge head on.