Assemblymen and state Senators both pointed to the increase in jobs the credit would have brought, not just in the field of construction but also for home contractors, furniture makers, and all the industries involved in building and outfitting new houses. But Gov. Christie has long made it clear that he was against the credit, for the simple reason that the state does not have the money (yet he found $875m available for the embarrassing Xanadu shopping center in the Meadowlands…).

The extended-deadline amendment to  HR 4213, the “American Jobs and Closing Tax Loopholes Act of 2010,” was added onto an amendment that also extended unemployment benefits. It just barely passed before the June 30 deadline, and was written so that there will be no gap between June 30 and when it was signed by the President in early July. Home buyers will still have to show all the evidence that they entered a contract before April 30.

So what does this mean? The newly-passed amendment eases the stress of thousands of NJ home buyers. The credit has proven to be extremely popular, which has been great for home sales, but has also led to backups in the normal time it takes to qualify for a mortgage. In addition, many first-time buyers are buying homes in foreclosure or short sale and the additional paperwork is adding to the logjam. Those of you waiting for your mortgage to clear, there is at least the bright side of amazing rates to look forward to, the best recorded by Freddie Mac since 1971, when it started following interest rates. The average annual rate for a 30-year fixed-rate mortgage (20% down) is now 4.69%. Just a year ago the rate was 5.42%. Though the low rates are a sign of the shaky economy, they are a positive for those looking to buy homes or refinance existing mortgages. No wonder mortgage brokers are swamped!

The Washington Post reports that rates for a 30-year, 20%-down fixed-rate mortgage are the lowest they have ever been since Freddie Mac started following rate changes in 1971. As of last Friday, 6/25, the average rate is  4.69%, down from 4.75% the week before and more than 5% a year ago. Rates for a 15-year, fixed-rate mortgage have gone even lower, as low as 3.875% (compared to 4.89% last year).

The Post explains that mortgage rates are dropping

because investors, nervous about global economic stability and a volatile stock market, are plowing their money into mortgage securities backed by Fannie Mae and Freddie Mac, assets that investors perceive to be relatively safe bets.

But despite the great terms, consumers are becoming less and less interested in buying houses and applying for mortgages. The end of the tax credit in April combined with shaky employment and stagnating wages have led to a steep drop in home sales, and a corresponding decrease in mortgage applications. While some people are still in the market to buy a home, the numbers are reduced and the lower mortgage rates are not working to attract those on the fence. Michael Fratantoni, a vice president at the Mortgage Bankers Association, says that consumers at this point are used to fairly low mortgage rates, and do not therefore see the 4.69% rate as a reason to commit to a mortgage if they are not otherwise prepared to.

However, for those who already have mortgages, now is an excellent time to refinance, and indeed, refinancers make up a whopping two-thirds of all mortgage activity. For those who can, refinancing is a great option, but not everyone who wants to will be able to, given that house prices have dropped and their own credit history might not fit the more stringent qualifications mortgage lenders have adopted since the subprime mortgage crisis.

1. 1999: 37% of buyers searched for a home online. 2009: 90% of buyers searched for a home online.
2. 1999: median home value is $137,600. 2009: median home value is $172,600
3. 1999: 82% of buyers purchased detached, single family homes. 2009: 78% of buyers purchased detached, single family homes.
4. 1999: 46% of buyers choose suburban neighborhoods. 2009: 54% of buyers choose suburban neighborhoods.
5. 1999: 68% of buyers were married couples. 2009: 60% of buyers are married couples.
6. 1999 and 2009: the median age for buyers was 39.
7. 1999 and 2009: “neighborhood quality, affordability, and convenience to work and school have consistently been top priorities.”

I bought my Montclair home just over a decade ago –11 years to be exact– and it has doubled in value, current market conditions notwithstanding.  Happy to be living here in Essex County, NJ and not where the median home value has increased by a mere 25% (see #2, above).

(Lani Rosales, December 31, 2009, Agent Genius Blog)

Well, it’s Black Friday and many brave souls are trying to get a jump on their Christmas shopping, but I’d guess that today quite a few folks are shopping not for a new Blu-ray but for a new house.  November and December are typically the quietest months in real estate because housing inventory drops and people put their home-buying efforts on the back burner while they busy themselves with holiday preparations.  But this year is different due to the extension of the home-buyer tax credit.  Numbers in Montclair are promising so far for this November: 22 houses have gone under contract this month as compared to only 11 for this time period last year.

In order to have a contract in place by the qualification deadline of April 30th, 2010, serious home buyers know that there’s no time to waste.  December will be a critical month for buyers to check out different towns and narrow down searches so that when the right house comes on the market they will be ready to pounce.  Also, many sellers have opted to keep their homes on the market during the holidays because of the extra surge of home buyers as well as to take advantage of the sparkle and magic that holiday decorations can lend to a house.

The tax credit for first time buyers has been extended to April 30th, 2010 and remains at $8000 for marrieds and $4000 for single filers.  However, the income limit has been raised to $125,000 for singles and $225,000 for marrieds. This makes the tax credit more compelling for home buyers and sellers in Montclair, where the median home price hovers around $750,000, as well as for many other towns in Essex County.

The tax credit has also been extended to current homeowners who have lived in their homes as a primary residence for 5 of the last 8 years. For current homeowners, the credit is $6500 for marrieds and $3200 for singles.  Purchase must be for a house that is $800,000 or less.  Click here for a chart summarizing the differences between the previous and new version of the tax credit.

The deadline for filing an application for the 2008 NJ Homestead rebate is September 1 of 2009.  Worksheet packets were mailed to non-senior and non-disabled residents during the last week of July. If you did not receive your application call the Homestead Rebate Hotline at 1-888-238-1233 or on the web at www.state.nj.us/treasury/taxation.

“The Homestead Rebate program provides rebates for homeowners and tenants who occupied their principal residence in New Jersey on Oct 1st, paid property taxes on that dwelling either directly or through rent, and whose gross income for the entire year does not exceed certain limits”