How Interest Rates Have Impacted Hoboken Real Estate

You’ve likely heard a lot about how mortgage interest rates have been shifting over the past year and how housing inventory all over the country has decreased in part due to rising rates. It’s easy to get spooked by the news, but when analyzing how these interest rates affect your own home values and finances, a lack of clarity can make things even more worrisome. Have no fear – we will guide you through the state of the Hoboken real estate market and show you how you can fare well during interest rate fluctuations.

Before we get into examining interest rates, let’s take a look at housing data for Hoboken, Hudson County, and New Jersey as a whole. As of May 2023, the year-to-date median sales price of a Hudson County single-family home is $490,000, which is a 3.9% decrease from the previous year. As for townhomes and condos, the median sales price stands at $560,000, which is a slight increase (+0.9%) from 2022. There is a larger market for townhomes/condos in Hoboken, so inventory for these home types will always be higher.

When the US economy faces some uncertainties, people tend to hold onto their property, which creates far less housing inventory on the market. In May 2023, there were a total of 216 single-family homes on the market (-25.5%) and 1,006 townhomes/condos (-36.6%) on the market. From this data, we can see that home values are doing pretty well in Hudson County, with single-family homes seeing only a minor shift in value, which is likely due to sellers feeling the need to compromise due to slightly higher interest rates.

In New Jersey, there has been a 26.7% decrease in overall home sales from 2022 to May 2023. The median sales price of a single-family home is $465,000, which is slightly less than the value of a Hudson County home. Homes in New Jersey tend to spend 44 days on the market in 2023, which is a 22.2% increase from last year.

As for townhomes and condos, the year-to-date median sales price has increased by 4.5%, reaching $350,000 as of May 2023. You’ll find the average townhome/condo to stay on the market for 40 days, which is only a 2.6% increase from the previous year. However, new listings have comparatively decreased from 2022 by 27.9%, which like Hudson County, is partially due to the new mortgage interest rates.

At the end of June, mortgage interest rates steadied at 6.71% for a 30-year fixed mortgage, which has pretty much been the standard for the entire month of June. This is a 0.23% increase from the beginning of January 2023 and a 0.62% increase from the 6-month interest rate low of 6.09% in February. You’ll likely see interest rates waver between 6.5% and 6.7% in July, with lower rates appearing in 2024, according to experts. Many claim that by March 2024, we will see rates lowering to about 5.6%, which is great for those preparing for a springtime move. Rate cuts in 2023 are very unlikely, but any large hikes are unlikely too. We are currently witnessing mortgage rates regulating themselves and setting a trend for the rest of the year.

Mortgage interest rates affect how much buying power homeowners have when looking for properties. You can expect a decrease of 5% in buying power for every half-percent rise in mortgage interest rates. Thankfully, interest rates are not projected to increase by that much throughout the rest of the year, so you can expect your current mortgage pre-approval to remain around the same even after you’ve reached the 90-day limit.

Fluctuating interest rates do not mean you should refrain from participating in the housing market. In fact, the current interest rate is nothing to be afraid of. In the past three years, interest rates only appeared to skyrocket due to the extremely low rates from 2020 to 2022. This near 2% rate decrease from 2019 during this two-year period was a means of encouraging market activity to boost the economy. With inflation rising and the economy slowly regulating, mortgage interest rates will likely find themselves a little above rates present at the beginning of 2019.

So, feel free to put your home on the market and find an amazing buyer! As long as you work with a great real estate agent, appropriately price the property, address interior and exterior concerns, and consider market seasonality, you shouldn’t have much of a problem selling your home.

For buyers, finding a great home may prove tricky due to low inventory, but working with a real estate agent that is familiar with Hoboken will allow you to score an unbelievable property that checks all your boxes. When trying to find an awesome deal on a home, consider looking at homes for sale in Hoboken outside of peak season during the fall and winter, when the market is a lot cooler, and buyers are looking to get their property off their hands before the end of the year.

Now that you’ve gained some clarity and insight into how the current interest rates have affected Hoboken real estate, you can get the most out of buying and selling a home in 2023. Confidence is key, but partnering with a knowledgeable and enthusiastic agent for all your housing needs can take your real estate game to the next level.

The Sutherlin Group is a team of dedicated, experienced real estate professionals and the #1 realty group in Hudson County for new construction sales. When unsure how to proceed, The Sutherlin Group will steer you in the right direction. Come along for the ride and reach out to The Sutherlin Group today!