New Jersey Housing Market Remains Strong Despite High Prices

Demand for homes continues to rise despite affordability challenges in the Garden State

Published on Feb. 18, 2026

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Despite New Jersey having some of the highest property taxes and home prices in the nation, the state's housing market remained strong in 2025 and is expected to see increased demand in 2026 as interest rates drift lower. However, housing affordability remains a significant issue, with a large gap between what homes cost and what many residents can afford.

Why it matters

New Jersey's high home prices and property taxes have created an affordability crisis, making it difficult for many residents to purchase homes. This has implications for the state's economy and quality of life, as people may be priced out of certain areas or forced to take on unsustainable debt. Addressing the housing affordability challenge is a key priority for the state's new governor.

The details

Data shows the median home price in New Jersey rose 5.4% to $525,000 in 2025. Experts cite a supply-demand imbalance, high regulatory costs, and exclusionary zoning as factors driving up prices. While interest rates are expected to decline, making homes more affordable, the gap between what homes cost and what residents can afford remains "astronomical." New construction has focused on high-end luxury homes rather than affordable options.

  • In 2025, the median home price in New Jersey rose 5.4% to $525,000.
  • Interest rates, which had risen as high as 7.8%, are expected to continue drifting lower in 2026.

The players

Jeff Otteau

Chief economist for Otteau Group, Inc.

Beverly Brown Ruggia

Financial justice program director at New Jersey Citizen Action

Jeff Kolakowski

CEO of New Jersey Builders Association

Gloria Siciliano

President of New Jersey Realtors

Governor Mikie Sherrill

The new governor of New Jersey facing the challenge of addressing the state's housing affordability issues

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What they’re saying

“The gap between what is available and what people can afford is astronomical. We don't have enough affordable homes for people to rent or purchase.”

— Beverly Brown Ruggia, Financial justice program director at New Jersey Citizen Action (whyy.org)

“We have a history of home rule and exclusionary zoning, which puts limits on home construction. We have a high regulatory environment that not only increases costs here in New Jersey, but it leads to long development timetables, which leads to a lack of investment here in New Jersey.”

— Jeff Kolakowski, CEO of New Jersey Builders Association (whyy.org)

“I think it's the fact that New Jersey is between Philadelphia and New York. Single-family homes have increased, the adult community, the condo market — we're still very active out there.”

— Gloria Siciliano, President of New Jersey Realtors (whyy.org)

What’s next

Governor Sherrill will need to work with the state legislature to address the housing affordability crisis, potentially through measures like enacting a community reinvestment law to spur more affordable housing development.

The takeaway

New Jersey's high home prices and property taxes have created a significant affordability challenge, pricing many residents out of the housing market. Addressing this issue will be a key priority for the state's new governor, who must balance the needs of residents, businesses, and the overall economy.