Home News Buying a home in New Jersey just got tougher

Buying a home in New Jersey just got tougher

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To put a brake on inflation, the Federal Reserve has raised interest rates by three-quarters. This is the biggest rate hike in 28 years.

This means that borrowing money for something, including getting a mortgage to buy a house, will cost you more.

According to Jeff Otteau, founder of Matawan’s Otteau Group Real Estate Valuation & Consulting Co. and managing broker of Hudson Atlantic Realty, this latest rate hike will accelerate and exaggerate the slowdown in the Garden State real estate market. Already in progress.

“Home sales in New Jersey have been declining for the eighth straight month,” he said.

Getting a mortgage will be more expensive

He said the main reason for this was that interest rates rose from about 2.7% to 5.3% compared to last year, “it’s so expensive that homebuyers can’t afford to pay the very high home prices today. I pointed out.

He said the just-announced rate hike will further raise mortgage rates, further slowing home sales and affecting other sectors.

“The next thing we can expect is demand for retail space, and the last sector where this hit is likely to be seen is apartments,” Otteau said.

Demand for apartment life increases

He explained that in the short term it means that the rent of the apartment will be even higher.

“The lack of affordability to buy a home will have the opposite effect of increasing rental demand,” he said.

Toms River Main Street Apartments

Toms River Main Street Apartments (Vin Ebenau, Townsquare Media NJ)

He pointed out that renting is “more popular than past generations as a lifestyle and is likely to overtake all other sectors in maintaining its momentum.”

According to Otteau, the revenue here is to achieve its goals as many families become even more demanding in the coming months.

“Here in New Jersey, we are facing formidable headwinds in almost every respect. The most threatening of all is the cost of living here and the very high costs for businesses to do business here.” He said.

Sooner or later, New Jersey’s high tax rates need to be addressed “to maintain the state’s future prosperity for future generations,” Otto said.

He said that three-quarters of rising interest rates reflect the approval that “the Federal Reserve’s approach to this point to cause a gradual slowdown in the economy and slow inflation has failed.” Stated.

David Matau New Jersey 101.5 reporter.You can reach him [email protected]

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