Should I Buy or Rent in New Jersey?
The average value in New Jersey was $440,000 in early 2022. That figure is up more than 7% from the year before.
Although that figure is about $100,000 less than what the national average is for the year in the United States, it’s also significantly lower than what you’ll find in NYC. Depending on the borough, you could save 50% or more on your purchase price by moving across state lines.
If you’re wondering whether it is time to buy or rent in NJ, a closer look at the housing market trends can help you see if it is right to apply for a mortgage or put down the cash you’ve saved.
What Are the Current Housing Trends in New Jersey?
When writing, the most comprehensive data available for the NJ housing market compares October 2021 figures with those from the year before.
Here is the information you need to know to see if the time is right for you to get into the market.
- The average sales price of a single-family home was $440,000.
- Condos and townhouses saw a 2% increase in their sales prices, rising to $305,000.
- The average listing price of single-family homes in New Jersey increased by nearly 5% to $515,000.
- Townhouses and condos had an average listing price of $375,000.
- Total sales of single-family homes were down 22%, with 7,600 properties processed.
- Over 2,550 townhouses and condos were sold in NJ in 2021, which is down more than 13%.
The total listings were down by over 20% for single-family homes (26.2%) and townhomes or condos (22.4%). The supply was down 30% and 43% for the month-to-month comparison.
That means more scarcity is in the market. Although low-interest rates in 2021 made it inviting for individuals and households to apply for mortgages, the market is squeezed by cash-only buyers who go above the listing price.
A 30-year fixed-rate mortgage in late 2021 could be obtained for under 3% for well-qualified buyers. Right now, that rate is over 5% and still climbing.
What Is Needed to Buy a Home in NJ Today?
If you’re planning to purchase a home in 2022, some good news is. First, home prices are expected to increase slower than in previous years, partially due to rising mortgage rates.
Are you thinking about purchasing a home in New Jersey this year? If so, here are some tips to help you be competitive.
1. Shop Lenders and Get a Preapproval
Down payment requirements are as low as 3% for some conventional loans. If you have more to put down, you can get some advantages in a seller’s market. If the buyer believes your mortgage will be approved, your offer is more likely to close.
Before finding a home, find a mortgage provider. Most brokers and real estate agents won’t entertain an offer unless you have a preapproval letter from a lender.
2. Find a Great Agent
After deciding where to live in NJ, find an agent who knows the community. Their experience will help you find the best deals out there.
3. Set Realistic Expectations
It can be discouraging not to have an offer accepted. When that outcome happens multiple times, some buyers get discouraged and stop looking for a new home. The negotiation process can go back and forth more than a dozen times before you get to where everyone walks away satisfied. It can take more time than you think to reach a move-in date, so be patient with the process.
4. Know Your Limits
Before you start shopping for a home, know the maximum offer you can make. It would help if you also thought about how it should be structured and where you’re willing to negotiate.
When Is It Better to Rent in NJ?
Renting is a better choice in NJ if you don’t have the money to make a competitive offer. With interest rates rising, your monthly payment will be higher if you are approved for a mortgage.
It’s also a better decision to rent if you know you’ll be moving in the next year or two. The costs will usually be lower, and there will be fewer tax consequences to juggle with that option.
Buying or renting is always a tricky decision in some ways for everyone. Buying loses some conveniences and increases costs, but you’re also investing in your future. On the other hand, rental payments are funds you’ll never get back.