For many New Jersey residents, buying a home for the first time has become more challenging than ever.
As the Garden State remains one of the hottest housing markets in the country, prices have been rising faster than wages. Couple that with mortgage rates remaining high, and first-time homebuyers face tough decisions.
Whether you’re a young professional, a growing family, or just tired of renting, navigating the steps to buying a house in New Jersey can feel overwhelming. The best first step is to compare your current salary with the going prices of starter homes right now—and it might surprise you to know that you do have options.
Starter Home Costs in New Jersey Compared to the Region
In New Jersey, the median price for a starter home in 2024 was $423,540.
That means, to comfortably afford this type of house at a 7% mortgage rate with 10% down, a household needs to bring in $101,442 per year. That puts New Jersey well above the national minimum income threshold for affording a starter home, which currently averages around $70,164.
Now, among Northeast states, New Jersey is more affordable than New York, where the income needed is $80,291. Keep in might though that in New York, home prices are far higher when you take Manhattan into consideration.
Additionally, New Jersey trails significantly behind Pennsylvania, where the average starter home price is just $186,050 and only requires an income of $44,561. New Jersey’s housing affordability is firmly in the bottom tier of U.S. states—it earned a C- grade from Realtor.com’s state report cards, based on weak affordability scores and a below-average rate of new home construction.
Is Buying a Starter Home in New Jersey Still Worth It?
With home prices up 70% over the past five years and monthly payments up 139%, buying a home for the first time in New Jersey is certainly more expensive than it used to be. Yet there’s still a potential payoff. Homeowners who purchased five years ago have likely gained significant equity, especially in growing towns like Vineland or revitalizing areas like Camden.
The challenge is whether future buyers will see the same return. New Jersey’s weak affordability metrics and sluggish new home construction are worrying signs for long-term affordability. The state’s C- grade on Realtor.com housing report card highlights that it’s struggling to keep up with demand. So unless more inventory becomes available, prices will likely remain high.
Still, for buyers able to act now—especially those who qualify for mortgages for first-time homebuyers, utilize down payment assistance, and understand how to qualify—home ownership in New Jersey can be a stepping stone toward long-term financial stability.
Best and Worst Cities in New Jersey for Starter Homes
Not all of New Jersey is priced out of reach. Here are three cities that still offer relatively affordable starter homes:
- Camden – Median price: around $200,000. Often overlooked, this city offers some of the most budget-friendly homes in the state and the community is thriving as crime rates have drastically decreased.
- Trenton – Median price: around $250,000. The capital city has a high supply of starter homes and is attractive for public sector employees.
- Vineland – Median price: around $265,000. A quieter South Jersey location with modest home prices and less competitive bidding.
In contrast, here are three of the least affordable cities for starter homes:
- Avalon – Median price: $2.98 million. One of the priciest beachfront communities in the state.
- Ocean City – Median price: $1 million. A popular destination with luxury second homes driving prices up.
- Hoboken – Median price: around $800,000. Proximity to NYC keeps demand and prices sky-high.
Clearly, the housing market is as diverse as the state itself. While you might not be able to enjoy a city-skyline view or access to the beach, there’s still opportunities to start your homeowner journey.
Carol McDaniel is a dedicated and results-driven professional with 5 years of experience and US News. Known for her strong problem-solving skills and collaborative mindset, Carol has built a reputation for delivering high-impact results across diverse teams and projects.
Throughout her career, she has demonstrated expertise in 2 core skills or areas, e.g., client relations and project coordination, and is passionate about continuous learning and meaningful contribution. Carol thrives in dynamic environments and consistently brings professionalism, adaptability, and a focus on growth to every role she takes on.