NJ Home Sales Trending Higher

According to the most recent OTTEAU Report, “The New Jersey housing market improved in October as home buyers took advantage of recent declines in home prices and lower mortgage rates.  In October, contract-sales jumped 10% after being down by 20% through the first 9 months of 2006.”

That this improvement occurred at a time when seasonal trends traditionally bring a decline in purchase activity is significant.  Also, the number of unsold homes on the market declined by more than 6%.  A closer look at unsold inventory indicates an overall supply of 8.9 months, down from 10.4 months.

According to Freddie Mac’s Primary Mortgage Market Survey®, the 30-year fixed-rate mortgage averaged 6.14 percent for the week ending November 30, 2006, which is lower than the 6.26 percent rate of one year ago.  Also contributing to sales performance was continued job creation with more people now working in New Jersey than at any time in history.

The improvement in the housing market is a direct result of the gain in housing affordability, and makes a strong argument that the current housing slump is more correction than crash.