ASK ELIZABETH: RATES & 2025 PROJECTIONS

Happy Holidays! As the year comes to a close, we hope you enjoy this update with Elizabeth’s views on the National and Hudson County real estate market. Whether you’re buying, selling, or just keeping an eye on market trends, continue on for helpful information including Rates, The National Association of Realtors’ 2025 projections, and the Local Market Landscape.

Rates

Strong employment data this month has stabilized the bond market, contributing to rate improvements over recent weeks. These gains have remained steady and show continued positive momentum. Many experts predict that the Federal Reserve will reduce rates another 0.25% later this month.

Buyer activity has naturally slowed during the holiday season, as is common this time of year. Likewise, many sellers seem to be holding off on listing their properties until the new year. This seasonal lull creates an opportune moment for buyers to act now before competition increases in January.

National Association of Realtors 2025 Forecasts

The National Association of Realtors (NAR) recently published its 2025 market projections, forecasting a 9% increase in existing home sales and an 11% rise in new home sales. The “locked-in effect,” where homeowners hesitate to move due to higher interest rates, is expected to diminish. This shift will be driven by life events such as growing families, marriage, divorce, downsizing, retirement, and job relocations, which often necessitate a move. The market is noticing that buyers are coming to terms with the possibility that the historically low rates of recent years may not return.

The buyer profile has also evolved significantly, reflecting notable trends:

Rise in Cash Buyers: This year, 26% of all transactions involved cash buyers, indicating a shift away from traditional mortgage reliance.
Older First-Time Buyers: The average age of first-time homebuyers has reached an all-time high of 38, driven by the need for buyers to save longer in order to afford increased home prices.
Return to Cities: Urban living is regaining popularity as the COVID-era appeal of suburban life decreases.
Buyers are Pooling Funds: More buyers are pooling resources, driven by the rise of multi-generational households and the need for cost reductions.
Single Women Leading the Market: Single women now represent 24% of buyers, significantly outpacing single men who account for just 11%.

Local Market Landscape

The Hudson County real estate market showed mixed trends this month as it closes out the year. Hoboken remains a very tight market with low inventory and high prices. Desirable properties continue to move very quickly. Across the rest of the county, inventory remains relatively low, reflecting a decline in new listings compared to earlier in 2024, with Hudson County experiencing a 14% drop in new listings from the previous month (often typical of a seasonal slowdown). We are seeing some neighborhoods in Jersey City soften, with properties sitting on the market longer and some home categories shifting away from a seller’s market into a buyer’s market. Click here for a detailed view of the most recent market neighborhood snapshot.

Looking ahead to 2025, demand is likely to remain steady due to Hudson County’s proximity to New York City and its strong appeal to commuters.

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