New Jersey home prices increased ...
June 25, 2013
New Jersey home prices increased for the 2nd consecutive
quarter due to rising purchase demand and tight inventory levels. Median home
prices increased by 2.07% in the 1st quarter. This latest increase follows a 2.91% rise in Q4.2012. The continuing rise in home prices is the result of increased home purchase demand, tight unsold inventory, and continuing economic recovery from The Great Recession. The number of homes
being offered for sale in New Jersey now stands at its lowest level in 8 years while the pace of sales is the highest in 6 years.
The combined effects of both higher home prices and mortgage rates in the 1st quarter caused home purchase affordability in New Jersey to decline in the 1st quarter. The Affordability Index in the state fell for the first time in two years to 130% indicating that today’s home buyers earning median income are able to afford a home that is priced 30% higher than the state’s median home value. This unusual opportunity illustrates the ‘sense of urgency’ that home buyers are feeling as they rush to take advantage of today’s affordable home prices and record low interest rates. Looking to the future, the combined effects of continued increases in home prices and mortgage rates will further erode home buyer purchasing power in the market.