Al’s June 2025 Market Watch

June, 2025

Has The Bridgewater Housing Market Peaked?

Over the past several months there has been numerous articles authored indicating that the housing market in many areas has peaked, with many showing declines in prices. The main culprits to this is a decrease in demand due to mortgage rates, affordability, and an increase in the supply of homes in the market.

Mortgage rates have remained stubbornly high. Even with the Federal Reserve decreasing its Fed Fund Rate last year, mortgage rates are still hovering between 6.7 percent and 6.9 percent. And even topped 7.0 percent occasionally. There are several reasons for this, including the instability in the world, and the notion of a near-term recession, but also the questions surrounding the administrations tariffs
and its effect on inflation and the national debt.

Affordability is a second hurdle for home buyers. Watchers of home purchases in the Township recognize that home prices have increased substantially since the pandemic. Estimates range from 35 percent to 50 percent depending on the style and condition of a home. Zillow had the Bridgewater housing market increasing by 3.6 percent from May ‘24 to May ‘25. Refin estimated it at 7.2 percent. In Bradley Gardens, it is becoming common to see homes reaching the $900,000 mark in the Township and even over $1.0M, to the glee of home owners and shock to home buyers. Add high mortgage rates to the equation and buyers are now straining to justify purchasing; both limiting demand.

Supply of homes will also effect housing prices. As more homes hit the market, buyers have greater choices and competition lessens for individual homes. Readers of Market Watch are familiar with the term Month’s Supply of Homes. This statistic provides an indication of the size of the new for-sale inventory. A low number means less supply and a higher number means more supply in an area. And the supply of homes in Bridgewater has increased over the past months. From a low of .98 month’s supply in October, 2024, supply has increased. In March it rose to 1.52 month’s supply, April 2.0 and in May 2.68. And this is in what normally is a busy spring selling season.

One company, Zillow, has taken notice of the above factors and has indeed called for a price decrease for housing this year. The company predicts prices will fall .7 percent in Bridgewater, .9 percent in Hillsborough, 1.0 percent in Somerville, and 1.5 percent in Raritan. It may be too early to agree with Zillow on price decreases in Bridgewater, but the factors are lining up to suggest the market may be turning to a more buyer friendly environment, after a long seller’s market.