u/AskJosh_MortgageGuy

Mortgage rates are still around 7.5%. We did have a couple of decent days, though at least.

I waited until 10 this morning to write this because I've learned my lesson about posting rate updates too early. Of course, with this market, I could wait until noon and still have everything change an hour later.

Average 30-year fixed rates are around 7.50%, FHA is 7.17% and VA is 7.18%. Still pretty lousy, although things did improve a little over the last couple of days.

Wednesday morning was looking pretty ugly. The 10-year Treasury got above 5.36%, which is the highest it's been in quite a while. Then bonds turned around and recovered pretty much everything they'd lost that morning. Thursday was another good day, and for once we actually managed to hang on to the improvement.

The funny thing is, after two good days, we're basically back to where we were last Friday (I feel like I say this every week). This morning we're a little weaker, but nothing too concerning so far. It's also the Friday before a three-day weekend, and those can be weird for the bond market. Some investors take their profits and call it a week, and others don't want to make any big moves before the holiday. I wouldn't read too much into today's trading unless something significant happens.

I think the people having the hardest time with all this are the ones who've been looking for a house for a few months. If you started shopping when rates were in the 6s, you might be looking at the exact same house today with a payment that's $300 higher. That's a pretty frustrating situation when you've already been spending your weekends looking at houses and trying to find something you like.

And people don't necessarily have another $300 a month they're comfortable spending. If you figured out your budget a few months ago and were happy with the payment, there's a good chance that number hasn't changed. So now you're either looking at less expensive houses, putting more money down if you can, or putting the whole thing on hold.

I don't have a lot of confidence that we're about to see a big improvement in rates in the near term. The economy is still doing pretty well, people are spending money, and we still have the situation with Iran and oil prices hanging over everything. A couple of good days in the bond market doesn't change much when the overall trend has been this bad.

I'd love to be wrong about that, and I certainly wouldn't complain if rates started coming back down. But if you're out looking at houses this weekend, I'd be using today's rates to figure out what you're comfortable spending. If we get lower rates down the road, great. I just wouldn't count on that happening when deciding what you can afford today.

NJ Mortgage and Housing Market Update

Rates are still...sucky? Crappy? I’ll go with crappy. Average 30-year rates are around 7.54%, 15-year around 7.18% and FHA around 7.15%.

There was a ton of movement this week just to end up pretty close to where we started (as always remember I am typing this around 9AM). The 10-year Treasury got above 5.30% at one point, rates got worse, then better, then worse again. Depending on which day you locked, you may have gotten a very different rate than someone who locked a day or two before or after you.

I actually think that kind of movement is one of the hardest parts for people buying right now. If you’ve been looking for a few months, you probably started when rates were in the 6s, possibly even low 6s. You can be looking at the exact same price house today and the payment is hundreds of dollars more.

Someone starting their search today at least knows what they’re dealing with from the beginning. If rates stay in the 7s, you start there and work backward from the payment and cash you’re comfortable with. Eventually people adjust what they’re looking for and what they’re willing to spend.

The bigger issue for rates is that people just keep spending money. We complain about inflation, gas, groceries and everything else being more expensive, and then restaurants are packed on Saturday night and everyone is still going on vacation. The stock market is doing well, companies are making money and people are still spending.

At some point you would expect higher prices and borrowing costs to hurt enough that people pull back. We really haven’t seen much of that yet. Until we do, or something changes with Iran and energy prices, I have a hard time seeing mortgage rates coming down a lot and staying there.

We did get a pretty lousy jobs report this morning, which for mortgage rates is actually good news. Only 29,000 jobs were added in September versus 90,000 expected. Unemployment went from 4.1% to 4.2%, and wages were up only 0.1% for the month versus 0.3% expected.

Bonds liked the numbers and we’re better this morning. I’ll take it, but I’m definitely not declaring victory because of one jobs report. We’ve had enough good mornings turn into bad afternoons lately that I’ve learned my lesson in this market.

If we start getting more reports showing the economy is actually slowing, then maybe we finally get somewhere with rates. For now, they’re still crappy and bouncing around way more than anyone trying to buy a house would like. After everything that happened this week, we’re basically back around where we started. Considering how the last few weeks have gone, I’m perfectly fine with that.

There’s a bill in Trenton right now that would require towns to allow homeowners to add a second living unit to properties zoned for single-family homes. That could mean converting part of the house, putting an apartment over the garage or actually building another smaller house in the backyard. It doesn’t have to be for your parents or your kids either. You could rent it to someone completely unrelated to you.

The town couldn’t just decide they don’t want these in single-family neighborhoods. If the property and the second unit meet the requirements, they’d have to allow it. They generally couldn’t require more than one additional parking spot either, and if the house is within a half-mile of public transportation, they couldn’t require another spot at all.

I really don’t know how I feel about this.

We obviously need more housing in NJ, and I’ve never considered myself part of the NIMBY crowd. If somebody has enough room on their property to build a small house for their parents or their kid who can’t afford a place of their own, I have absolutely no problem with that. I don’t even think I have a problem with someone building one and renting it out.

Except now I’m picturing my neighbor doing it.

I live on a street of single-family homes. If another house suddenly went up in the backyard next door and another family moved in with another couple of cars, I’d probably be annoyed. But my neighbor could also pretty reasonably tell me it’s his property and none of my business. Which is making me question the whole “I’m not a NIMBY” thing a little bit.

I’ve always been pretty firmly on the side of we need more housing and NJ makes it way too hard to build anything. I also tend to think it’s your property, you should be able to do what you want with it within reason. But apparently “within reason” gets a little more complicated when I’m looking out my own window.

Maybe this is how everyone becomes a NIMBY. It sounds completely reasonable until the property next door is the one getting another house.

In October 2023, the 10-year Treasury Bond touched 5%, mortgage rates jumped to almost 8%, and everyone in real estate was panicking. Then rates dropped for 60 straight days, down to 6.5%. A similar move occurred in November 2022, with rates spiking to just over 7% before falling 1% over the following 60 days. Many in the industry are now wondering: are we setting up for the same type of reversal as mortgage rates just spiked to 7.5%, or is this time different?

While I'm in the "anything and everything can happen" camp, there are signs that this time might just be different. Elevated mortgage rates can stick around longer than anyone wants to see. Global rates may be repricing the cost of money as economic growth continues despite high energy costs. The Iran War may have been the catalyst, but it's also quite possible it just pulled forward the inevitable. Here are a few key points being discussed for why rates may remain elevated:

• Economic Growth - The Atlanta Fed's GDP tracker is near 5% for the quarter, one of the highest readings in years. When the economy is strong, investors demand a higher return to lend money long-term. Strong growth alone can keep rates elevated, even without inflation.
• Massive Borrowing (Supply) - The US Government is issuing significant debt (deficit spending, COVID debt rolling, war funding) while AI companies are borrowing hundreds of billions for infrastructure buildouts. This is old-school supply/demand principles - similar to when housing prices jumped in 2021 with all the demand; bonds are no different.
• Treasury Inflation-Protected Securities (TIPS) - By this measure, the bond market appears to be pricing in more growth than inflation. TIPS are also called the "real yield"...If the 10-year bond is trading at 5.25%, and 10-year TIPS yield 2.9%, this shows the market pricing in just 2.35% expected annual inflation. The war/oil premium may be a much smaller piece of this than most people think.
• Yen Carry Trade - People much smarter than me keep bringing this up as a pressure point on global rates. I don't understand it well enough to explain it. If someone here does, I'd love the plain-English version.

So what does this mean for real estate? At first, the logical response is: real estate transactions and buyer activity freeze. We are certainly seeing that in our company's numbers this September. I also wrote earlier about the local August data showing pending sales collapsing...that trend continued this month.

The real estate market seems to thrive more on rate stability than on the actual rate. Don't get me wrong, lower rates help spur demand...but stable higher rates allow people to plan, and those with income, assets, and life desires that support a move tend to act. When the rate of change causes wild swings in payments, plans get disrupted. Eventually, though, buyers and sellers recalibrate what it takes to transact, and the market starts moving again. Will that be later this year? Or will we need to wait until the spring? I guess we will see soon enough.

Any new catalyst can disrupt every prediction...an oil collapse, a balance-of-power shift in Congress this November, a data surprise...that's precisely why every major agency has been wildly wrong forecasting rates more than a quarter or two out these past few years. I hope rates go lower...I want them to go lower...I think real estate needs them lower...but there's a good chance that I just don't get what I want...

Cory Booker introduced a housing bill Friday that would put $300 billion into the national Housing Trust Fund over the next 10 years. It would also expand tax incentives to get more affordable and workforce housing built near train stations and other major transit.

His office says it could mean more than 2 million new homes nationwide. That’s their estimate, and of course this still has to get through Congress.

We talked a couple months ago about NJ looking to build housing on NJ Transit property in Bayonne and Linden, so the idea of building around transit isn’t new here. This bill would put a whole lot more money behind it.

I was more interested in who some of this housing would actually be for. Households making as much as 120% of the area median income could qualify for some of the units. At least 20% would have to go to households making 50% or less, and another 10% would be for households at 30% or less.

120% of the median income can be a pretty decent household income in NJ. We’re not just talking about people at the bottom of the income scale anymore. But we also aren't only talking about people at the top as this excludes a lot of them.

I think that’s where the housing problem has gotten to here. Prices are high, rents are high, property taxes certainly aren’t cheap and mortgage rates just jumped well into the 7s. Making good money doesn’t necessarily mean housing feels affordable anymore.

Now whether $300 billion is what it takes to fix any of this, I have no idea. That’s a ton of money and right now it’s just a proposal. I’d like to see a lot more about what we actually get for that $300 billion before getting too excited about it.

And I like that there’s an upper limit on who can get these units. In Bergen County, 120% of the median income is just under $153,000. There are plenty of households in NJ making well above that, and those are usually the people with a lot more room to compete when housing gets expensive. If you’re building new housing specifically for people below that line, at least some of it stays out of that competition.

Well, rates suck. There really isn’t a better way to put it this week.

The average 30-year is around 7.45% this morning and the 10-year Treasury hit 5.22% yesterday. Mortgage bonds lost about 180 basis points in two days, which is a massive move in that short of a stretch.

There’s a lot working against rates right now. Inflation is still hanging around and the economic data this week was much stronger than anyone in the bond market wanted to see. Businesses are doing well, hiring picked up and people are still spending money.

That last part gets me. We all complain about how expensive everything is, myself included, but try getting a dinner reservation on Saturday night. Restaurants are packed, airports are packed and people are still taking vacations. Companies are making money and the stock market is doing just fine. We complain about prices and then keep spending anyway.

That’s good for a lot of things. Mortgage rates aren’t one of them.

We do look a little better this morning. The U.S. and Iran are reportedly talking about a possible deal that could reopen the Strait of Hormuz, oil is down around $93 and bonds have gotten a little bit back. I’ll take anything at this point, but after losing about 180 basis points in two days, this morning barely registers (and it's still early - yesterday started off good too and we got smashed).

What’s really rough for buyers is how fast this happened. Someone looking at 6.625% a few weeks ago and around 7.5% now is paying roughly $400 more a month on a $680,000 mortgage. People are going to pause when their payment changes that much in a few weeks.

You’ll hear a lot of loan officers saying this is actually a great time to buy because some of those buyers will disappear and you can refinance when rates come back down. I agree that fewer buyers can mean less competition. I’m already seeing houses that probably would have had a pile of offers a few weeks ago getting less attention.

Where I have a problem is telling someone they’ll just refinance next year. Maybe they will. I hope they do. But I have no idea where rates will be next year, and neither does anyone else.

Same thing with paying a bunch of points to get the rate down. Sometimes it makes sense. But if you’re spending tens of thousands of dollars upfront, we need to figure out how long it takes to get that money back. If you refinance before then, you spent a bunch of money buying down a mortgage you didn’t keep very long.

The old “marry the house, date the rate” line is definitely going to make a comeback now that rates are in the 7s. Although loan officers were saying the exact same thing when rates were in the 6s, so I guess all those people are still dating.

If you find a house you really like, the payment works at today’s rate and there are fewer people fighting you for it, that can work in your favor. I just wouldn’t make the numbers work by assuming something happens later that none of us can predict.

I saw another huge development proposed in Jersey City. This one is at 310 Washington Street downtown, where they want to replace a surface parking lot with three towers and 2,055 apartments. There’s also a 1,049-unit project moving forward in Journal Square, and obviously there’s already a ton of construction happening all over the city.

I’m not against any of it. NJ needs more housing and a surface parking lot in downtown Jersey City seems like a reasonable place to put some of it. But 2,055 apartments in one shot is enormous, and I don’t know how you add that many people without needing more of everything.

The schools are what got me thinking about it. Even if most of these apartments don’t have kids, some of them obviously will. And this isn’t one building with 100 apartments. Jersey City has been adding thousands of units, with thousands more coming.

The city has proposed using 10% of the money it gets from PILOT agreements for school infrastructure, which makes sense. I have no idea if that’s enough, but at least it acknowledges that you can’t keep adding housing without eventually needing more schools.

And it’s not only schools. The PATH is already packed. Traffic certainly isn’t getting better. I don’t live in Jersey City, so the people who do can probably speak to this better than I can, but I certainly talk to enough people that live or want to move to the area to get a feel.

I still think they should build. We can’t complain that NJ doesn’t have enough housing and then fight every time somebody tries to add housing. I just think once you start talking about projects with 2,000 apartments, where all those people are going to go to school and how they’re going to get around becomes a pretty big part of it.

There’s a new real estate term I learned recently called “housefishing,” and unfortunately it’s exactly what it sounds like. It’s catfishing, except the 6'2" guy with a full head of hair is a three-bedroom colonial in Union.

You find a listing with a huge living room, gorgeous backyard and beautiful renovated kitchen. Then you go see it and the living room is 11 feet wide, the backyard looks like it hasn’t seen water since Memorial Day and apparently that kitchen is in another house.

Real estate photography has always involved a little creative license. Wide-angle lenses have been turning 9x10 bedrooms into airplane hangars for years. We all understand the game. AI has now given us the ability to stop exaggerating the house and just make things up.

Dead grass? Not anymore. Ugly countertops? Congratulations on the quartz. Neighbor’s house six feet away? What neighbor? That enormous tree blocking half the backyard? The tree has been removed from the internet and will be waiting for you when you arrive.

Virtual staging doesn’t bother me if it’s disclosed. An empty living room with a fake couch helps people picture the space. Fine. But once we start changing permanent things about the property, I feel like the house and I should at least have exchanged a few messages before it starts lying to me.

The part I really don’t understand is what happens when the buyer gets there. You can Photoshop away the above-ground pool, but unless the agent has a backhoe scheduled between the listing appointment and Saturday’s showing, I’m pretty sure we’re going to find it.

If you’re looking at houses online, old listing photos are becoming more useful than ever. Street View too. And look at the actual room dimensions. If Zillow shows a 10x11 bedroom containing a king bed, two nightstands, a dresser, a Peloton and what appears to be a small reading nook, somebody is lying.

Buying a house in New Jersey already involves competing with 14 other people, waiving half your dignity and spending an amount of money that would have gotten you a small European principality 20 years ago. The least the house can do is actually be the house.

We talked enough about the Fed yesterday, so I won’t go through all of that again. They raised rates .25% Wednesday, Warsh made it pretty clear they’re still worried about inflation, and bonds sold off while he was talking.

Yesterday was much better. Bonds got back everything they lost Wednesday afternoon and actually improved from where they were before the Fed meeting. Oil went up more than $3 during the day too, and normally that would be another reason for bonds to sell off. They didn’t. With what oil has been doing to us lately, I was happy to see that.

There may be something to what we talked about yesterday with the Fed being more aggressive actually helping longer-term rates. They raised rates Wednesday and basically told us there are probably more hikes coming, but bonds are still better than they were Tuesday. It sounds completely backwards, but the bond market cares a lot more about getting inflation under control than it does about the Fed Funds rate itself.

We’re giving some of yesterday back this morning. Mortgage bonds are down about a quarter point as I’m writing this and oil is up again. I’m not all that bothered by it yet after the move we had yesterday, especially on a Friday.

The 10-year is right around that 5% level again. If we can stay under it and mortgage bonds don’t get hit much harder today, we’ll still finish the week better than we were before the Fed meeting. I definitely wouldn’t have guessed that Wednesday afternoon while I was watching bonds get smoked during Warsh’s press conference.

Mortgage rates themselves are still high (there is no sugar coating that). The average 30-year is around 7.19%, jumbo is around 7.35% and FHA is around 6.81%. There isn’t much positive I can say about those numbers if you’re trying to buy a house right now.

But I’ll take the fact that bonds didn’t fall apart this week. The Fed raised rates, told us more hikes are probably coming, and oil is still bouncing around $100. Somehow we may still finish the week with the 10-year under 5%.

The bar for good news is pretty low around here right now.

I’m sure plenty of homebuyers saw the headlines yesterday and assumed mortgage rates went up because the Fed raised rates .25%. That’s not really how it works. The Fed raised its rate from 3.75% to 4%. That has a much more direct impact on things like credit cards, HELOCs and other short-term debt than it does on a 30-year mortgage.

The announcement came out at 2:00 and the bond market barely moved. Everyone knew the hike was coming and it was already priced in. Mortgage rates didn’t suddenly jump .25% when the Fed made it official.

The market started moving once Fed Chairman Kevin Warsh began his press conference at 2:30. He talked about an economy that is still pretty strong and inflation that hasn’t improved enough. It also became pretty clear that the Fed is willing to keep raising rates if they think that’s what it takes to get inflation back down. The market is expecting another hike before the end of the year, and quite a few Fed members think they’ll need to go further than that.

Bonds sold off while he was talking and we gave back the improvement we had earlier in the day. Mortgage rates finished at their highest level since January 2025.

As backwards as it sounds, the Fed taking a harder line on inflation could eventually be good for mortgage rates. Long-term rates care a lot about inflation. If the bond market believes the Fed is serious about getting it under control, that’s one of the things we need before mortgage rates can really start coming down.

Of course, eventually doesn’t help much if you’re trying to buy a house right now. If Warsh had sounded less aggressive yesterday, rates probably would have liked it in the short term. Instead, it sounds like the Fed is prepared to keep going until inflation shows them what they want to see. That could mean waiting longer for any real improvement in mortgage rates.

We’ve gotten some of yesterday afternoon’s losses back this morning, but it isn’t even 9 AM yet and I’ve learned not to get too excited about a good morning in the bond market.

The biggest thing I’d take from yesterday if you’re buying a house is that a .25% Fed hike does not mean your mortgage rate just went up .25%. We got a pretty good demonstration of that yesterday. The hike itself barely moved the market. What the Fed said about where things go from here mattered a whole lot more.

Apparently buying a house with your brother or sister is becoming more of a thing, and considering what it costs to buy in NJ right now, I get it.

According to Bank of America, 22% of Gen Z homeowners who bought in 2025 bought with a sibling. That was 12% in 2024 and only 4% in 2023. I definitely did not expect the number to be quite that high.

You don’t have to be married to buy a house together. Siblings can buy together, friends can buy together and unmarried couples can buy together. From a mortgage standpoint, two people who aren’t married buying together is completely normal - we see it all the time. The one I personally see the least? Siblings (hence my surprise at the numbers).

At current NJ prices, combining two incomes can make a pretty big difference. Trying to qualify for and carry the payment on a $750,000 house by yourself at today’s rates is a lot different than splitting that expense between two people. And if mortgage rates stay where they are right now, over 7%, I wouldn’t be surprised to see that 22% number keep going up.

Where I’d be careful is everything outside of the mortgage. If I were buying with a sibling or friend, I’d want it in writing who owns what percentage, how repairs are getting paid for, what happens if one person wants to sell and what happens if somebody eventually wants out.

Nobody buying a house with their brother wants to start the process by discussing what happens if they eventually can’t stand each other. I’d still much rather have that conversation before buying the house than after one of them wants their $200,000 worth of equity.

Renting a place with your brother or sister is one thing. Buying a house together is a whole other animal, and I’m curious how often this is actually happening around here. If anyone has bought a house with a sibling and wants to share how it worked out, good or bad, I’d love to hear it.

I usually try to find something positive to lead with on these Friday updates. This week I’m not going to bother pretending. Mortgage rates are miserable.

The average 30-year fixed is around 7.07% this morning and jumbo is around 7.20%. The 10-year Treasury is sitting around 4.97%, getting dangerously close to 5% for the first time since October 2023. We started the week with the bond market closed Monday and things pretty much went downhill once everyone came back to work.

Oil has been a big part of the problem. It broke $100 this week and kept moving higher, which is exactly what the bond market doesn’t want to see when everyone is already worried about inflation. Yesterday’s PPI report didn’t help either. The overall number wasn’t terrible, but some of the pieces that eventually feed into the Fed’s preferred inflation measure came in hotter than expected. By the end of the day the 10-year was up about 11 basis points and mortgage bonds had lost almost a full point. For some perspective, that is an absolutely awful day for mortgage rates.

This morning we got CPI and core inflation came in at 0.3% for August instead of the 0.2% the market was expecting. Headline inflation is still running at 3.4% year over year. The market was already nervous about another Fed hike and that core number was enough to push the odds much higher for next week’s meeting.

There was one slightly bizarre sideshow in the middle of all this. Treasury Secretary Scott Bessent has been pretty vocal about long-term rates being too high and Treasury increased its bond buybacks this week. He even told reporters, “I am the house now. You can bet against me if you want.” Treasury then announced a $6 billion buyback Wednesday and the bond market basically responded by sending rates higher anyway. Not exactly the reaction he was looking for.

If you’re trying to buy a house right now, I know seeing mortgage rates back over 7% is brutal, especially when NJ home prices haven’t exactly come down at all. I wish I could tell you this is obviously the top and rates are about to turn around, but I wouldn’t tell a client that because nobody knows.

I also wouldn’t put your entire home search on hold just because rates are ugly right now. If today’s payment is too high, then the house is too expensive and I’d keep looking. But if you find the right house and the payment works for you, I wouldn’t assume waiting six months automatically puts you in a better spot. Rates could be lower by then, but the house could also cost more, there could be more buyers competing with you, or we could still be sitting here complaining about 7% rates.

I’ve been doing mortgages for about 25 years and I’ve watched rates go through plenty of cycles, so I know this one eventually changes too. I just have absolutely no idea when, and anyone telling you they do is guessing. For now I’ll be watching that 10-year and hoping I don’t have to start next Friday’s post by explaining what happens when it breaks 5%.

I keep seeing articles about how the housing market has finally shifted back toward buyers, which I'm sure is great news if you happen to live almost anywhere other than New Jersey.

Redfin looked at 49 of the largest housing markets in the country and 39 are now considered buyer's markets. Northern NJ went the other way and is the second strongest seller's market in the country, behind only Long Island. Central NJ came in fifth.

They estimate Northern NJ has about 21% fewer sellers than buyers, with Central NJ around 13% fewer. For this study, Northern NJ includes Essex, Hunterdon, Morris, Sussex and Union counties, along with Pike County in PA. Central NJ is Middlesex, Monmouth, Ocean and Somerset.

If you're currently trying to buy a single-family home in one of the more desirable towns around here, I'm guessing none of this is particularly surprising. I still have clients running into multiple offers on good houses in NJ while clients purchasing in other parts of the country where I do business are negotiating price cuts and seller concessions.

It isn't the same everywhere in NJ either. Redfin specifically mentioned that condos in Jersey City and around Newark have more inventory, while desirable suburban single-family homes are still heavily favoring sellers. That's pretty consistent with what I've been seeing.

This is why I think some of the national housing market coverage has become almost useless for buyers. There really isn't one housing market right now. Someone in Florida can be shopping in a legitimate buyer's market at the same time someone here is deciding how much over asking they're willing to go on a house that was listed Thursday.

So when you see another headline about buyers finally having the upper hand, just keep in mind that the people writing it probably aren't trying to buy a house in North Jersey right now.

Fannie Mae dropped a major guideline change. It's one that will help many buyers who feel stuck in their current home and are limited by income, preventing them from moving to a new home that better suits their needs.

Quick background: When someone wanted to buy a new home but keep their current one as a rental (which is most move-up buyers right now, given how many people are sitting on 3%-ish rates), they often needed rental income from the current house to qualify for the mortgage on the new one. That meant scrambling to find a tenant while under contract. Lenders then wanted the signed lease, proof that the security deposit and first month's rent were collected and cashed, and an appraisal report validating that the rent was at market rate. All while juggling a purchase.

It was stressful enough that plenty of people just didn't make the jump.

Now the new rule: lenders can use an appraiser's rent schedule OR researched rent comps from Zillow, Redfin, etc. No lease, no tenant hunt during your contract period. We can simply use 75% of the supported market rent to offset the current home's payment when qualifying. The only main stipulation is that you need 6 months of reserves covering the departing home's full payment, in addition to normal reserve requirements.

One important note: there is still no equity requirement in the departing residence. This is huge for many areas in the US, but specifically in the DMV, where we have seen values drop quite a bit in some micro-areas.

Inventory in desirable areas of NOVA, Montgomery County, and parts of DC has been so low that many people with limited incomes just don't bother to engage. We also have areas of DC that are struggling to sell (hello condo market), where selling right now isn't the best option. Renting to get to the other side of the downturn is usually the best advice... and this rule helps those people too. If you bought a DC condo with a low down payment a few years ago, you might be underwater after selling costs. You couldn't sell without writing a big check, and you probably couldn't qualify to carry both payments either. Now there's a possible path forward.

One word of caution. This rule assumes you actually intend to rent the home. If you use it while planning to quietly sell after closing, that's misrepresenting your intent on a mortgage application, and lenders will likely be watching this post-closing.

I'll be watching how individual lenders roll this out over the next few weeks... some may add their own requirements on top. But as written, this is the most flexible this guideline has been in about 20 years! I'm glad to see guidelines addressing real concerns in the marketplace.

If you want to nerd out and read the exact rule, I'll drop the link in the comments...as you'll need to dig through the Fannie selling guide!

It’s jobs report Friday, and this was easily the biggest piece of economic data for rates this week. Unfortunately, the number came in a whole lot stronger than anyone expected.

The economy added 162,000 jobs versus the 56,000 expected, which is a huge difference. The unemployment rate held steady, although the labor force participation rate increased by 0.2%, which helped keep unemployment from falling.

Bonds sold off immediately after the report and the 10-year Treasury moved higher, but as I’m writing this around 9AM, the 10-year is only about 3 basis points higher on the day. I actually expected worse with a jobs number that far above expectations.

It wasn’t a particularly good week for rates leading up to this morning either. The 10-year started the week around 4.75%, right around its highest closing level since January 2025. Monday wasn’t a disaster, but yields have been creeping higher lately and we added a little more to that.

Tuesday brought more air strikes in Iran, which sent oil higher and bonds lower. Oil hit its highest level since late July and Treasury yields were back around their highest closing levels since January 2025. Oil continues to be a problem for rates because the longer it stays elevated, the more concern there is about what it eventually does to inflation.

Wednesday was pretty quiet, with yields briefly hitting another high but barely moving for most of the day. There wasn’t much in the economic data or news to move things one way or the other, and after Tuesday, I was perfectly fine with a boring day.

Thursday was easily the best day of the week for bonds. Fed Governor Christopher Waller said he didn’t think the Fed would need to hike at the upcoming meeting unless the data gave them a reason to, and the market liked hearing it. We ended the day with a decent improvement in rates, but as of this morning, the jobs report has pretty much erased it.

Average mortgage rates coming into today were 6.88% for a 30-year conventional, 6.48% for a 15-year and 6.44% for FHA. If the bond market stays where it is today, I’d expect those numbers to go up a little.

If you floated your rate into this morning hoping for a weak jobs report and a better opportunity to lock, you lost that bet, at least as of 9AM this morning (as we have learned, things can change throughout the day). Now we have a three-day weekend in front of us with inflation data coming next week. Oil has been moving higher, we just got a much stronger jobs report than expected, and I’m not crazy about adding three more days of risk to a loan that needs to be locked.

That’s basically where rates have been lately. We get enough good economic news to start thinking we might finally get some relief, and then something else comes along and takes it right back.

My last two posts happened to have New Jersey sitting at #1 in the country. First for property taxes, then for estimated lifetime taxes. Not something everyone was celebrating.

The response I saw more than anything else on both posts was some version of, “Yeah, but look at our schools.” And they have a point.

New Jersey is #3 in the country for public schools in WalletHub’s latest rankings, behind Massachusetts and Connecticut. More importantly, we’re #2 for school quality. Rankings are rankings, so I wanted to look at some of the numbers that got us there.

NJ is #2 in reading scores and #5 in math. We’re tied for the lowest dropout rate in the country and #3 for the percentage of students scoring at least a 3 on AP exams. About 8.5% of our public schools are ranked among the top 700 in the country.

Our graduation rate hit 91.8% last year, the highest it’s ever been. NJ is also #1 in the country for AP course availability. More than 93% of our public high schools offer at least one AP class and 86% offer five or more.

So if we’re going to complain about all the things that are ridiculously expensive about living here, we should probably give NJ credit for this one. Our public schools are legitimately among the best in the country.

It also explains something I see constantly with homebuyers. A lot of people start with the school district and figure out the house from there. They’ll spend another $100k on the house, take on a bigger monthly payment or give up things they wanted in the house because getting into a certain district matters more.

I get it. I have two kids in public school and the schools mattered when we bought our house too.

Where it gets a little harder is when you’re choosing between a good district and one of the handful of NJ districts with a huge reputation. There can be a pretty massive price difference between two towns that are 10 minutes apart, even though both have good schools.

That doesn’t mean the more expensive district isn’t worth it. For a family with kids who might spend 12 years there, it absolutely could be. But when you’re already buying in a state with some of the best public schools in the country, I think there are a lot more good options than people sometimes realize.

After two straight posts about NJ being #1 for something expensive, I figured we were due for one where being near the top is actually a good thing.