National Home Prices Remain Flat: What Today’s Housing Market Means for New Jersey Homebuyers

The U.S. housing market continues to send an important message to prospective homebuyers: while home prices are no longer rising at the rapid pace seen during the housing boom, they also are not experiencing the dramatic nationwide decline that some buyers have been waiting for.

According to the latest S&P Case-Shiller Home Price Indices, one of the most closely watched measures of residential real estate values in the United States, national home prices remain relatively flat. However, looking only at the national number doesn’t tell the entire story.

Housing markets are becoming increasingly regional.

Some areas of the country continue to experience home-price appreciation, particularly in parts of the Midwest and Northeast, while several Sun Belt and Western markets have experienced modest year-over-year declines.

For homebuyers in New Jersey, Pennsylvania, and throughout the Northeast, understanding these regional differences can be extremely important when deciding whether now is the right time to buy a home.

Home Prices Are Flat Nationally — But Not Everywhere

One of the most interesting developments in the current housing market is the growing difference between individual cities and regions.

According to the latest Case-Shiller data, Chicago led the markets measured with a 6.5% annual increase in home prices. New York followed with a 3.8% increase, while Cleveland recorded a 3.2% annual gain.

At the other end of the spectrum, several markets experienced modest declines. Seattle recorded a 2.3% year-over-year decrease, while Denver, Tampa, Dallas and Phoenix were also among the markets reporting declines.

Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, described the situation clearly, noting that geographic differences in home-price performance remain significant.

That is an important distinction for anyone following headlines about the housing market.

There really isn't one single "U.S. housing market."

Real estate is local.

A buyer searching for a home in South Jersey can face completely different inventory, pricing and competition than someone buying a home in Florida, Texas, Arizona or Washington.

What Does This Mean for New Jersey Homebuyers?

For buyers considering homes in South Jersey and throughout New Jersey, the latest numbers are particularly interesting because the Northeast continues to show greater price strength than several other parts of the country.

That doesn't necessarily mean every New Jersey home is appreciating or that every town is experiencing the same level of demand.

But it does demonstrate why waiting for a nationwide housing crash may not be an effective home-buying strategy.

Markets with limited housing inventory can remain competitive even when national home-price growth slows.

In many New Jersey communities, buyers are still competing for desirable homes, particularly properties that are priced appropriately, located in desirable school districts or neighborhoods, and in move-in condition.

For buyers, that makes preparation extremely important.

Should You Wait for Home Prices to Fall?

This is one of the most common questions we hear from prospective homebuyers:

"Should I buy now, or should I wait for home prices to come down?"

Unfortunately, nobody can reliably predict exactly what home prices or mortgage rates will do next.

But buyers should understand the tradeoff involved with waiting.

Suppose a buyer delays purchasing a home because they are hoping prices will decline 5%. If the local housing market instead remains flat or appreciates slightly, that buyer may spend another year renting without receiving the price reduction they expected.

There is also another variable: mortgage rates.

The price of the home is only one component of affordability. Your mortgage interest rate, down payment, property taxes, homeowners insurance, loan program and mortgage insurance can all affect your total monthly housing payment.

This is why making a home-buying decision based solely on predictions about home prices can be misleading.

Mortgage Rates Matter Just as Much as Home Prices

Consider two buyers purchasing the exact same home at the exact same price.

If one buyer receives a lower mortgage rate, their monthly payment and total interest expense can be substantially different.

That's why prospective homebuyers should evaluate the entire financing picture rather than simply watching home prices.

Depending on the buyer's situation, mortgage options may include conventional financing, FHA loans, VA loans for eligible borrowers, first-time homebuyer programs, down-payment assistance options and other financing strategies.

The best mortgage isn't necessarily the loan with the lowest advertised interest rate.

The right mortgage strategy considers the borrower's credit profile, available cash, expected length of homeownership, monthly payment goals and overall financial situation.

A More Balanced Housing Market Can Create Opportunities

A slower housing market isn't necessarily bad news for buyers.

During the most competitive periods of the housing boom, buyers frequently encountered multiple offers, bidding wars and homes selling almost immediately after being listed.

In some markets, buyers waived inspections, appraisal protections and other contingencies simply to make their offers more attractive.

A more balanced market can give buyers something extremely valuable: options.

When homes remain on the market longer, sellers may become more willing to negotiate.

Depending on the property and local market conditions, buyers may be able to negotiate on price, closing costs, repairs or seller concessions.

Seller concessions can sometimes be particularly useful because they may help a buyer reduce their upfront closing expenses or potentially fund an eligible interest-rate buydown, depending on the mortgage program and transaction.

Every transaction is different, but a slower market can sometimes create financing opportunities that weren't available when sellers were receiving multiple offers immediately.

Why Mortgage Pre-Approval Matters in Today's Market

Even as national home-price growth moderates, desirable homes in New Jersey can still attract significant interest.

That's why getting pre-approved for a mortgage before seriously shopping for a home remains one of the most important steps a buyer can take.

A mortgage pre-approval can help you understand:

• Approximately how much home you may qualify to purchase

• Your estimated monthly mortgage payment

• Your expected down payment

• Estimated closing costs

• Potential mortgage programs available to you

• How different purchase prices may affect your payment

• Whether changes to your credit or debt could improve your financing options

Pre-approval also allows you to shop with a realistic budget instead of falling in love with a home and trying to determine financing afterward.

For many buyers, the question shouldn't simply be, "What is the maximum amount I qualify for?"

A better question is:

"What purchase price gives me a monthly payment I'm comfortable with?"

Those can be two very different numbers.

First-Time Homebuyers Shouldn't Assume They Need 20% Down

Another misconception that keeps potential buyers on the sidelines is the belief that purchasing a home requires a 20% down payment.

While putting 20% down can have advantages, many mortgage programs allow qualified borrowers to purchase with considerably less.

Depending on eligibility and the loan program, buyers may have access to low-down-payment conventional mortgages, FHA financing, VA financing and certain first-time homebuyer or down-payment assistance programs.

The right option depends on your individual financial situation.

Instead of assuming you don't have enough money to buy, it can make sense to speak with a mortgage professional and determine what options may actually be available.

Buying a Home Is a Personal Decision — Not a National Headline

National housing statistics are useful, but they shouldn't make your home-buying decision for you.

Your local housing market matters.

Your income matters.

Your credit matters.

Your down payment matters.

Your monthly budget matters.

And your plans for the next several years matter.

A buyer planning to remain in a home for many years may evaluate today's market very differently than someone expecting to relocate in the near future.

The important thing is to make the decision based on your actual numbers rather than fear of what the housing market might do next.

What If Mortgage Rates Fall After You Buy?

Some buyers remain on the sidelines because they are waiting for mortgage rates to return to the historically low levels seen several years ago.

There is no guarantee that will happen.

And even if mortgage rates eventually decline, falling rates could bring additional buyers back into the market, potentially increasing competition for a limited number of homes.

A homeowner who purchases when the numbers make sense may also have the possibility of refinancing later if mortgage rates decline sufficiently and refinancing makes financial sense.

However, buyers shouldn't purchase a home based on the assumption that refinancing will definitely be available or beneficial in the future.

The mortgage should make sense based on today's numbers first.

Home Prices Being Flat Doesn't Mean the Market Has Stopped

The latest Case-Shiller numbers reinforce something we've been seeing for months: the housing market appears to be moving through a period of slower and increasingly regional price movement.

Some markets are appreciating.

Some are declining slightly.

Others are essentially flat.

For homebuyers, that's not necessarily a reason to rush into a purchase — but it also isn't necessarily a reason to sit on the sidelines indefinitely waiting for a dramatic nationwide price correction.

Instead, buyers should focus on the factors they can control: their credit, savings, monthly budget, mortgage strategy and the price they're willing to pay for the right property.

Thinking About Buying a Home in New Jersey?

If you're considering purchasing a home in South Jersey or elsewhere in New Jersey, one of the best first steps is to understand your financing options before you begin seriously shopping.

Michael "Mortgage Mike" DeSanto and the CrossCountry Mortgage team can help you review potential loan programs, estimated payments, down-payment options and closing costs so you can make an informed decision based on your actual financial situation.

Whether you're a first-time homebuyer, moving into a larger home, downsizing, relocating or simply trying to determine whether buying makes sense right now, a mortgage consultation can give you a much clearer picture of what's possible.

The national housing market may be relatively flat, but your opportunity to buy a home ultimately depends on your local market — and your numbers.

Michael "Mortgage Mike" DeSantoCrossCountry MortgageNMLS #1766709

Mortgage programs, rates and qualification requirements are subject to change. All loans are subject to underwriting approval. This information is for general educational purposes and is not a commitment to lend.