u/AskJosh_MortgageGuy

After four straight bad days, the bond market finally decided to stop punching us in the face.

We’ve now had two decent days in a row, and as of this morning things are at least leaning positive again. We’re still a couple hours away from lenders posting rate sheets, so nobody start doing victory laps through the kitchen yet.

Yesterday was classic 2026 market behavior. Overnight headlines said Iran’s nuclear material was still a sticking point in negotiations, which kept bonds slightly weaker most of the morning. Then right after 1pm, another headline dropped saying a “draft agreement” could be announced within hours. Oddly enough, the nuclear issue apparently still wasn’t resolved, but markets basically shrugged and rallied anyway.

At this point, bond traders react to headlines the way a dog reacts to hearing a cheese wrapper from three rooms away. No patience. No context. Just immediate movement. Oil prices dropped, bonds improved, and mortgage pricing followed along nicely.

One thing to keep in mind today - traders sometimes hedge a bit heading into a three-day holiday weekend because nobody wants to get blindsided by geopolitical news while eating hot dogs on their boat. So if peace-talk headlines continue, that could help us. If things escalate again over the weekend...well...you know the other option.

Average 30-year fixed rate is sitting around 6.65%. Which is still kind of crazy when you remember we were flirting with rates that started with a 5 not all that long ago.

Enjoy the holiday weekend, everybody. Be safe!

One thing I think a lot of NJ buyers miss when comparing renting vs. owning is the tax side of the equation. And no, I’m not saying “buy a house for the tax write off.” That’s how you end up with a boat too. I’m saying the numbers can be a lot more meaningful than people realize, especially in North Jersey.

Real example:

Buyer in Paramus making $190K/year.
$750K loan at 6.375%.
About $47,800 in mortgage interest in year one and roughly $12K in property taxes.

At that income level, the estimated annual tax savings versus renting is over $13,000.

Does it suddenly make NJ housing affordable? Absolutely not. This state still treats a basic colonial like it’s waterfront property in some tropical paradise. But when people only compare monthly payment vs. rent and ignore the tax side completely, they’re not looking at the full picture.

And before someone says it - yes, I always recommend talking to an accountant about your specific situation. Tax situations vary a lot, and I’m not your CPA. I just spend an unhealthy amount of time staring at mortgage math and calculating tax refunds.

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Aside from backyard grilling - anyone have any recommendations or fun things they like to do over Memorial Day weekend? Any local events?

Fannie Mae just updated their forecast and the message is pretty straightforward - mortgage rates aren’t in a rush to fall. They’re now projecting the average 30-year to hover around 6.3% into 2027, maybe easing to 6.2% after that. The earlier idea of seeing 6.1% anytime soon has quietly disappeared.

Now, I’ve been doing this long enough to know one thing - forecasts are educated guesses, not promises. Fannie Mae has revised their outlook plenty of times before. There have been years where economists predicted rates would fall, and they went up. Or expected them to rise, and they drifted lower. The housing market has a way of humbling anyone who thinks they’ve nailed it. So this isn’t gospel. It’s just the current read on the board.

That said, rates have been sitting in the mid-6s for a while now. For NJ buyers, the bigger takeaway isn’t whether 6.3% becomes 6.2%. It’s that we probably shouldn’t be planning our lives around a dramatic drop in the near term. If the payment works and you plan to stay put for a while, buying can still make sense. You can refinance if rates improve. You can’t go back in time and grab a house once prices move again.

If the numbers don’t work, that’s fine too. No one gets a trophy for stretching themselves thin in this market. That’s where creative structuring, assistance programs, or just waiting it out comes in.

And one more NJ-specific reality: if single-family construction slows, that’s not exactly a recipe for price relief in a state that already doesn’t build enough.

Bottom line is forecasts change. They always do. But today’s message from Fannie Mae is clear: don’t expect a rescue from rates anytime soon. The real question is whether today’s market works for you, not whether an economist thinks 6.1% might show up two years from now.

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If you didn’t lock yesterday…today might be a little painful. Of course I am typing this at 9AM when most rate sheets don't come out for another hour or so - but it doesn't look good.

Treasury yields jumped again this morning. The 10-year is around 4.55% and the 30-year is pushing 5.1% (which is the highest in a year). When those move up, mortgage rates move up. That’s the engine behind everything.

Inflation isn’t cooling the way the market wants. Consumer Price Index is sitting at 3.8%, wholesale prices are hotter, and import costs are climbing. Investors see that and think, “Rate cuts aren’t coming anytime soon,” so long-term rates get pushed higher.

And unfortunately, it’s probably fair to say the broader trend right now is rising rates. Since April 17th, we’ve had more bad days than good. The best way to picture it is a yoyo on an escalator. Yes, it goes up and down every day. But if the escalator is moving up, you’re still ending up on a higher floor. And lately, the escalator looks like it’s headed to the top floor.

That doesn’t mean panic. It just means be realistic. If you’re under contract, lock strategy matters a lot in this kind of environment (and so does your float down policy!). If you’re shopping, just know this isn’t random lender behavior - it’s the bond market reacting to inflation and big-picture money stuff.

We’ll see what next week brings. But for now, the momentum isn’t exactly our friend.

I keep seeing buyers throw around “waiving the appraisal contingency” like it’s some sort of reckless move. In a competitive NJ market, it can absolutely make your offer stronger. But most people misunderstand what the real risk is.

Quick basics. An appraisal contingency says the house has to appraise at or above your contract price or you can renegotiate or walk away. If you waive it, you’re agreeing to move forward even if it comes in low. Now here’s the part most buyers get wrong.

Myth: If it appraises 25k low, I have to bring 25k extra to closing.

Reality: Most of the time, especially with conventional loans, that’s not how it plays out. If the appraisal is low but still within the loan program’s acceptable loan-to-value limits, your cash to close doesn’t have to change. What usually changes is the loan structure. That can mean a little more PMI but no change in the cash outlay.

Example 1: You’re buying in Cherry Hill for 600k with 10 percent down. The home could appraise as low as $570K ($558K for FTHBs) and the only thing that would happen is a slight increase in payment. No change in the cash to close unless you choose to make up the difference.

Example 2: You’re buying in Short Hills at 1.2M. Bigger numbers mean more strategy. You could adjust rate, points, structure, or down payment. There are options - But it’s not automatically a disaster. Take a look at the pic I included.

Now, when should you not waive it? There are some times I advise against it. If you’re already at the minimum down payment your loan allows. If even a small bump in payment would stretch you thin. If you plan to refinance or sell soon and need the equity cushion.

There’s also a middle ground a lot of buyers ignore: an appraisal gap clause. Instead of fully waiving, you agree to cover up to a certain amount if it comes in low. For example, you’ll cover up to 15k. That tells the seller you’re serious, without writing a blank check. This is where working with a smart buyer's agent comes into play.

Curious - would you waive it in this market? Or is that a hard no for you? I will say a majority of the winning contracts I am seeing have it waived but only after modeling out the risks.

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Would you ever buy next to a busy road if the house was otherwise perfect?

I’m talking layout you love, kitchen dialed in, yard great…but you’ve got steady traffic out front. Not a highway. But definitely not a cul-de-sac where kids on bikes outnumber cars.

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Is that an automatic no in NJ? Or is price + location enough to make you live with a little white noise?

Curious where everyone draws the line.

If another lender shows you one rate with a “free one-year buydown” and makes it sound like they’re doing you a favor…it's math time!

Here’s what a 1-0 buydown actually is. Your rate is 1% lower for the first 12 months. After that, it goes to the full note rate for the remaining 29 years. The lender sets aside money at closing to cover the payment difference for that first year. When the 12 months are up, the subsidy is gone and you’re at the full payment.

On a $600,000 loan, if the note rate is 6.25%, your payment might be about $3,694. With a 1-year buydown at 5.25%, you’d be around $3,313. That’s roughly $381 a month in “savings,” or about $4,500 total for the year. Guess what the buydown costs? About $4,500.

There is no free anything. The lender funds that buydown the same way they fund any credit - by building it into the pricing. In a lot of cases, that means your permanent rate is about .25% higher than it would’ve been on a standard zero-point loan.

So your real options usually look like this:

Option A: 6.25% for 30 years.
Option B: 5.5% for year one…then 6.50% for years 2–30.

Same money. Different packaging. And here’s the part almost no one explains. If it’s lender-paid and you refinance in 8 months because rates drop? The remaining buydown money doesn’t come back to you. It doesn’t go to your principal. It goes back to the lender. Gone.

Now, there times it makes sense. If a seller is already covering all your closing costs and there’s leftover credit you truly can’t use any other way, a short-term buydown can be strategic. That’s a real conversation. But in NJ, most buyers still have closing costs to cover. In those cases, taking the lender credit and applying it directly to your costs is usually the cleaner, smarter move.

This isn’t about saying buydowns are bad. We do them when they make sense. It’s about seeing both options side by side. If your loan officer hasn’t shown you the same loan with the buydown converted into a straight lender credit at closing, ask for it.

If they hesitate showing you that comparison…that tells you everything you need to know.

Yesterday was a perfect example of why I don’t pretend to “predict” markets, bur rather I react to them (some quick locks happened mid-day).

Overnight we got some hopeful Iran headlines and bonds rallied a bit. By 9am? Reversal started. By late morning, more headlines hit saying Iran rejected the U.S. framework that helped the rally in the first place. Then we had chatter about Hormuz blockades, Saudi and Kuwait involvement, explosions in southern Iran…and bonds sold off steadily into the afternoon. By 3pm, the 10-year was up over 4bps and MBS were down about a quarter point. Not ideal.

As of 9am this morning, we’ve clawed back a small piece of yesterday’s damage. But we’ve still got two hours until lenders post rate sheets, and it’s jobs report day. Better than expected. 115,000 jobs added, unemployment steady at 4.3%, and wage growth a bit softer at 0.2% for the month, 3.6% year-over-year. So not a weak report. Not a blowout either.

Traders are also still whispering about a possible Iran deal…which feels like the sequel nobody asked for.

Bottom line: it’s volatile. If you’re under contract, this is why having an actual lock/float plan matters. If you’re shopping, just know the swings right now aren’t random - they’re headline-driven and fast.

I hope you all have a wonderful weekend!

We just crossed 300 members in here. Which might not sound like a lot until you realize that’s 300 people voluntarily choosing to talk about New Jersey real estate on the internet.

I appreciate all of you. The good takes, the bad takes, the F these property taxes takes, the rate debates - all of it. What I really want this to be is useful. Real conversations. Real experiences. Doesn't matter if you are looking to buy, own a home, or are a life long renter.

If you’ve got something you’re seeing out there, post it. If you’re confused about something in the process, ask it. If you just closed and learned something the hard way, share it.

This only gets better if we build it together. And honestly, it’s been pretty great to watch so far. I wasn't sure anyone would join - so thank you to the first 300.

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Go pull up the real estate section on CNBC right now. These are all sitting on the front page at the same time:

• Fed Keeps interest rates unchanged in April
• Mortgage rates move higher after latest Iran war news
• Mortgage rates surge to nearly four-week high
• Mortgage rates are rising again, but homebuyers are trickling back
• Mortgage rates sink again, and homebuyers jump back in
• Mortgage applications rise as rates fall to one-month low

Read those back-to-back and tell me this market isn’t a little unhinged. This is exactly why a lock/float strategy matters once you’re under contract.

Step one of working with an actual mortgage advisor (not a rate salesperson) is showing you multiple rate and cost combinations. Not just “here’s today’s rate.” You should see how the payment changes if we buy it down, if we take a credit, if we adjust structure. That’s advising.

Step two is the lock/float conversation. It should be based on your risk tolerance, where your approval thresholds sit, how tight your debt-to-income is, what current market conditions look like, how rates have been trending (everyone should know my yoyo on an escalator analogy by now), and whether your lender even has a legitimate float-down policy if the market improves.

If your loan officer’s strategy is simply, “So…do you want to lock?” that’s not strategy. That’s outsourcing the decision to you and hoping for the best.

In a market where rates can move on oil headlines overnight and then reverse the next morning, you need someone who actually studies this stuff and can explain the why behind the recommendation. You’re not hiring someone to quote a rate. You’re hiring someone to manage risk on a six- or seven-figure liability. It boggles my mind that people have financial advisors but not mortgage advisors - your home is likely the most expensive thing you will ever buy in your lifetime...

First - yes, it’s the first Friday of the month. No, we did not get the jobs report today. That’s next week. So the usual “brace for impact” payroll volatility is still sitting out there as a potential market mover.

Yesterday was interesting. Bonds and oil have basically been moving in lockstep higher since mid-April. Rates rising, oil rising which is not our favorite combo. Overnight, it looked like we may have finally hit what traders call a “blow-off top,” which is just a fancy way of saying things went up a little too far, a little too fast, and gravity showed up.

Even better, bonds didn’t really flinch at the lowest jobless claims reading in more than three years. That’s usually the kind of data that pushes rates higher. Instead, the market mostly shrugged (thankfully).

As of around 9AM this morning, things are leaning in our favor. Oil is down on reports that Iran responded to a draft peace agreement. Lower oil tends to help bonds, and when bonds improve, mortgage rates follow.

If you floated this week, you’re at least heading into the weekend with momentum on your side instead of against you. Although we have not made up the losses we saw on Wednesday. We’ll see what next week’s jobs report has to say about it.

What's the best farmer's marker in NJ? Bonus points if it is in South Jersey. Looking for one with as much variety as possible!

If you were only shown one rate and one cost option…you were sold a mortgage. I’m not saying that to be dramatic or sarcastic. I’m saying it because it happens all the time and it drives me insane.

There is no such thing as “the rate.” There are multiple ways to structure the exact same loan. You can pay points to lower the rate. You can take a slightly higher rate and reduce your upfront costs. You can land somewhere in the middle. All of those are valid depending on what you’re trying to accomplish.

Paying points, for example, is basically prepaying interest to get a lower rate. That can be smart if you’re keeping the loan long enough to actually benefit from it. If you’re refinancing or moving in a few years? You may never hit the break-even. And if you have followed me long enough you know, the breakeven is not just the cost divided by the payment savings.

In NJ, where closing costs and home prices are already no joke, that decision matters even more. Although I must say it is helpful that the buyers here don't pay the transfer taxes - believe it or not, our closing costs are actually cheaper than a lot of other states - although building that escrow account for our property taxes - well, you know.

You should always see multiple options laid out clearly. Not just “here’s your rate.” That’s like buying a car and only being told one payment without seeing how it’s structured.

A mortgage isn’t something you’re supposed to be sold on. It’s something you’re supposed to understand and choose. If no one walked you through different structures, that’s not strategy. You're working with a sales person and not an advisor.

Quick reality check for anyone house hunting right now: insurance is no longer a throwaway number. Premiums have been rising for several years and the expectation is that trend continues through 2026. It’s not just “Florida problems” (although I do lending there and those policies are ABSURD). It’s rebuilding costs, labor, materials, more severe weather events, and carriers tightening up how they evaluate risk.

Here in NJ, that matters. Between coastal exposure, older housing stock, and flood zone variables, pricing can swing more than buyers expect. There’s an old rule of thumb that insurance runs about .15% of the home’s purchase price. That used to get you in the ballpark. Lately? We've been using .25% - .30%. A serious jump.

And here’s something most buyers don’t realize - insurers are using aerial imagery and drones now. They’re not just relying on what’s on your application. If the roof looks worn, if there are tree limbs hanging over it, if there’s visible exterior deterioration, you may get a higher premium or they may not be willing to insure you at all.

This year alone I have had multiple clients who actually struggled to find a policy - this was rarely an issue even three years ago. Everyone focuses on price, rate and taxes. Insurance is quietly becoming a number homebuyers should look at early on.

Here’s something interesting that should stir the pot a bit - Inventory has been creeping up in a lot of places nationally (including in some spots in NJ). But here’s the real question…if sellers refuse to price realistically, are buyers actually gaining any leverage?

Because more listings doesn’t automatically mean more deals. I’m seeing plenty of homes hit the market priced like it’s still peak 2022. And when they don’t get the traffic they expected, Instead of adjusting quickly, some sellers just sit. Or they do a tiny price cut (woohoo).

So technically inventory is higher. Practically? Buyers are still staring at numbers that don’t make sense, especially here. In NJ specifically, we’re not in some wide-open buyer’s market. Good homes that are priced correctly still move. The ones that aren’t just linger and create this illusion that “there’s more out there.”

Curious what you’re seeing. Are you noticing more options over the last couple weeks but not necessarily better value? Are sellers ever negotiating in your experience?

Let’s hear it. The Spring market is upon us!

Happy Friday. It sure is nice to be here because this week was...tiring.

This week was basically a slow drift lower in rates until today. Net-net, we’re almost exactly where we started. So if you were hoping for fireworks, sorry. This was more of a “responsible adult progress” kind of week.

The bigger story right now is the headline circus tied to the ongoing Iran situation. There’s not a ton of real military or diplomatic movement, so the news cycle is filling the void. Around 1pm yesterday, a couple wires pushed stories about a key Iranian negotiator resigning and air defenses being activated, which implied the ceasefire was cracking. Bonds, oil, and stocks all reacted immediately.

Both stories were refuted.

Markets corrected, but not completely. And here’s the part most people miss: even when something gets walked back, a little damage usually sticks. Either because traders don’t fully believe the refutation, or because volatility makes everyone a bit jumpier.

Then this morning we got another curveball - reports that the DOJ is expected to drop its criminal probe of Powell. After that, bonds and Fed Funds Futures improved on their own, separate from what stocks and oil were doing.

Bottom line: average 30-year is 6.32%.

We’re not in a straight-line rally, but we’re also not in trouble. If you’re floating, you’re basically treading water right now. If you’re thinking refi and you’re in the high 6s or 7s, this is still a conversation worth having.

Enjoy your weekend - I know I will.

Alright, this one actually matters. FHFA just announced that we’re finally moving beyond the same old “Classic FICO only” world for mortgages. Newer credit models like VantageScore 4.0 and FICO 10T are being brought into the mix for Fannie, Freddie, and FHA loans.

Translation: the mortgage industry is stepping into this century.

Why it matters - the newer models look at broader data and are generally better at evaluating real-world credit behavior. So if someone’s been paying rent and utilities on time but doesn’t have a perfectly manicured credit card history from 2009, this could help.

It also introduces actual competition into credit scoring for mortgages. For years it’s basically been a one-option menu. Competition usually means better pricing and better flexibility. In theory. We’ll see how that plays out in practice.

This doesn’t mean 580 scores are suddenly getting great rates. But it does mean the system is evolving in a way that could open doors for buyers who’ve been unfairly boxed out by outdated scoring models.

For once, this isn’t noise. It’s structural change. And in mortgage land, that’s rare. Now, let's see how quickly mortgage companies (including my own) adapt.