The Housing Crisis in New Jersey: Priced Out and Boxed In

For New Jersey residents hoping to buy a home, the current housing market feels like being stuck between a rock and a hard place. Home prices across the Garden State continue surging even as mortgage rates spike, putting ownership financially out of reach for many prospective buyers.

The astronomical rise in interest rates – topping 7% in 2022 for the first time in 20 years – has created a “golden handcuff” effect for current NJ homeowners. Those who locked in ultra-low rates around 3% during the pandemic are reluctant to sell and take on a new mortgage at today's high rates. That leaves eager would-be buyers with very few options.

Inventory remains extremely tight, exacerbating competition and home price growth. Available homes for sale statewide plummeted over 45% since before the pandemic began in early 2020, per Realtor.com data. Sellers are staying put, while demand rises.

Driving demand in New Jersey is the aging baby boomer generation. Although counterintuitive, the boom in retirees and seniors is increasing housing demand, according to analysts.

As boomers divorce or are widowed, they form new households requiring homes or rentals. Downsizing to smaller units doesn’t reduce total demand. And millennials reaching their prime home buying years are also competing for limited supply.

The result is a suffocating mismatch between excessive demand among aging boomers and short supply that restricts options for younger buyers. This imbalance could last several more years until new construction catches up.

For New Jersey residents seeking affordable home ownership, the market squeeze provides yet another reason to consider moving out of state. Neighboring areas in eastern Pennsylvania offer lower home prices along with reasonable commutes to NJ job centers. Escaping the Garden State may provide the only path to achieving the American dream of owning your own home.

The housing affordability crisis reinforces New Jersey’s reputation as an unattainable place to put down roots. Our state’s high cost of living and taxes already fuel an exodus of residents, especially young families. Priced out of the housing market, more will choose to pick up stakes and find affordability elsewhere.

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