The cost of housing continues to rise nationwide, but the affordability crisis has become particularly severe in New Jersey. For many residents, the dream of owning a home—or even finding a reasonably priced rental—has slipped further out of reach as prices climb faster than incomes.
Recent analyses reveal that New Jersey is struggling more than most states when it comes to balancing household income against the cost of a mortgage or rent. Nearly one in three homeowners with a mortgage are now considered “cost-burdened,” meaning they spend more than 30 percent of their monthly income on housing. Renters face an even harsher reality, with more than half falling into that category.
This growing affordability gap highlights a structural problem that goes beyond temporary economic pressures. By 2030, New Jersey is projected to rank among the most expensive states in the nation for housing, with the ninth-highest median home price and the second-highest household income requirement to comfortably afford one. Even though the state boasts one of the strongest median incomes in the country, the math no longer works for a large share of families and individuals trying to secure housing.
One of the primary drivers of these challenges is limited housing supply. Suburban areas of New Jersey, long resistant to development, face some of the tightest inventory shortages. Demand remains strong, but the lack of available homes for sale continues to push prices upward. This problem is amplified by inflation and high interest rates, which have made mortgages significantly more expensive, leaving buyers squeezed from multiple angles.
Another factor complicating the situation is the pace of income growth compared with housing costs. From 2020 to 2025, the income needed to purchase a typical New Jersey home surged by more than 50 percent. Wages have not kept up, and the gap is leaving many unable to enter the housing market, even with stable jobs and above-average salaries.
Nationally, the median home price reached $375,000 in the third quarter of 2025—a record high and nearly five percent higher than last year. For perspective, 99 percent of counties across the United States are now considered less affordable than historic averages. In about a third of these counties, owning a median-priced home would consume more than 43 percent of a typical household’s wages, a threshold experts define as “seriously unaffordable.” New Jersey counties are well represented in these statistics, reinforcing the state’s position as one of the most difficult markets in the country.
The typical American homeowner now spends around $2,123 per month on housing expenses, which equates to more than a third of their income. In New Jersey, that number can run considerably higher, particularly in metropolitan areas close to New York City and Philadelphia where demand remains strong and competition is fierce.
While many families are feeling the crunch, some segments of the market continue to showcase luxury and exclusivity. Properties like the penthouse at Jersey City’s 77 Hudson highlight the dual nature of New Jersey real estate. The nearly 1,800-square-foot residence offers panoramic views of Manhattan, resort-style amenities, and a $2.59 million price tag—features that stand in stark contrast to the affordability challenges facing average buyers.
As the affordability crisis deepens, New Jersey finds itself at a crossroads. Without significant efforts to expand housing supply and address the growing gap between wages and home prices, the state risks pricing out a substantial portion of its residents. For many households, renting has become the only option, but even rental costs continue to rise at unsustainable rates.
New Jersey remains one of the most desirable places to live in the country thanks to its proximity to major cities, vibrant communities, and high quality of life. Yet these very strengths are contributing to a housing market that is becoming increasingly out of reach. For those looking to understand the trends shaping the future of housing in the Garden State—and to explore the latest market updates, property listings, and real estate opportunities—resources like Explore New Jersey Real Estate provide valuable insights.
Whether you are a prospective buyer, renter, or investor, keeping an eye on these shifts will be essential. The challenges are real, but so too are the opportunities for those prepared to navigate New Jersey’s complex and evolving housing landscape.
