Buying a Home in New Jersey

Quick insights

• New Jersey is a captivating state with rich cultural history, safe communities, quality school districts and amazing entertainment.
• Buying a home in New Jersey is typically more affordable compared to New York and offers a wide range of communities to suit your lifestyle.
• There is always something to explore in New Jersey from aquariums, The Hudson River Waterfront, mountains and state parks.

Living in New Jersey: What you need to know

New Jersey has a lot to offer from beautiful beaches and spectacular state parks to family-friendly neighborhoods and recreational outdoor activities. There are many advantages to living in New Jersey such as charming suburban communities, top-rated employers and access to a wide range of amenities. Depending on where you reside, you may also benefit from convenient access to New York City and Philadelphia, where the job market could be a positive factor that may lead to a higher quality of life.

In addition, the region's diversity may provide an opportunity to meet people from all walks of life and gain exposure to new languages, cultures and cuisine. Before you start packing, check out our guide on the top things you should know before living in New Jersey.

Is it worth buying a house in New Jersey vs. New York City?

New Jersey offers a nice advantage to residents who are interested in living near the world class cities of New York and Philadelphia. At the northern end of the state, you’ll have easy access to the bustling metropolis that is New York City. Residents in the southern portion of New Jersey will be conveniently situated near the historic city of Philadelphia. We've compiled a few things for you to consider when deciding whether to buy a home in New Jersey or New York City. You can create a cost of living comparison to find out what your money can get you in both New York and New Jersey.

What to consider when buying a home in New Jersey

Before purchasing your dream home in New Jersey, it’s important to determine how much you can afford to pay. The homebuying process typically starts with you establishing a budget based on your take-home pay and estimated down payment. Next, explore various mortgage options based on your needs and get preapproved by a lender. Now, the fun part: You can begin the house hunting process! Work with a local real estate agent to view several houses, conduct home inspections and make an offer.

Styles of homes to buy in New Jersey

Much like many urban centers, New Jersey offers a broad range of homes such as single-family homes, townhomes and condos. The architectural styles of New Jersey homes give you more options and flexibility to choose a home that fits your needs and preferences. The most popular styles of homes are Colonial, Contemporary, Ranch-style and Victorian.

Home values continue to rise across the United States, and New Jersey is no exception. According to Rocket Homes, as of March 2024, home values were estimated to be approximately $512,908.

Pros and cons of living in New Jersey

Many people opt to live in New Jersey because housing, transportation, utilities and food is cheaper than in New York. The advantages of living in New Jersey include:

• Proximity to major cities: New Jersey’s proximity to New York provides you with access to jobs, different transit options and world-class entertainment without the hefty price tag.
• Affordable: New Jersey is not inexpensive, but some of the home prices can be more affordable in New Jersey compared to New York City.
• Access to scenic landscapes and natural treasures: You can explore the natural beauty of New Jersey from mountains, lakes, state parks and the Jersey Shoreline including 130 miles of coastline. A few notable spots are Mount Tammany, the Botanical Garden and Liberty State Park.

The challenges of living in New Jersey:

• High property taxes: New Jersey’s tax rate is one of the highest in the nation. You might receive a large property-tax bill in the mail.
• Traffic congestion:Population growth combined with a lack of infrastructure has contributed to higher levels of traffic congestion. You can probably expect a longer commute during rush hour.
• Variable weather: The climate can vary day-to-day in New Jersey. You may experience a variety of weather conditions which can be an adjustment. 

Working in New York and living in New Jersey: What to expect

Living in New Jersey while working in New York has many advantages making it more accessible to take a trip to Manhattan for a fun night out or exploring nearby cities like Philadelphia. According to PODS, residents can get to New York City from Jersey City in only 30 minutes by taking the ferry or train.

Commuting from New Jersey to New York City

There are different commuting options from New Jersey to New York with the most common forms being public transit and driving. Commuting may require you to balance the demand of your job with your social life. Consider the longer commute and block off time to enjoy leisure activities, hobbies and spend time with your family or friends. Commuting costs will vary depending on where you live.

Average cost of living in New Jersey

According to RentCafe, the cost of living in New Jersey is 11% higher than the national average . When it comes to housing, groceries, transportation and other expenses, expect to pay a little more to cover necessities. An effective way to manage expenses and save money is to create a monthly budget plan. You can save money by following some of these tips:

• Shopping at budget-friendly grocery stores
• Avoiding unnecessary purchases
• Prioritizing savings goals before allocating to other areas of your budget

  Property taxes are high in New Jersey, but there are property tax relief programs available to residents. Consult a tax expert for more details.

Average house price in New Jersey

According to New Jersey Real Estate Network, as of Spring 2024, the current housing market is on a steady climb with home prices increasing. There are many factors that can influence house prices such as location/proximity to major metro areas, amenities, home size and the condition of the home.

House prices vary based on what region of New Jersey you decide to purchase your home from. First-time homebuyers who are considering homes in northern New Jersey may pay a higher price per square foot because of the proximity to New York City.

Down payment for a house in New Jersey: What you need to know

Down payment requirements are based on the mortgage lender’s guidelines, and you’ll be happy to know there are assistance programs. First-time homebuyers may be able to secure a loan that accepts a lower down payment such as Federal Housing Administration (FHA) loans and Veterans Affairs (VA) loans for eligible applicants. The New Jersey Housing and Mortgage Finance Agency (NJHMFA) provides guidance and tools to help you make the right decision based on your finances.

New Jersey offers various first-time homebuyer assistance programs including:

• NJHMFA’s First Generation Down Payment Assistance Program: NJHMFA provides up to $22,000 for qualified first-time homebuyers to help cover your down payment and closing costs. The assistance is provided as an interest-free, five-year forgivable second loan with no monthly payment.
• Freddie Mac HFA Advantage^® Mortgage: This program offers affordable mortgage insurance and financial assistance with down payments and closing costs.
• Homeward Bound Program with Down Payment Assistance (PDF): This program provides a competitive 30-year-fixed-rate government insured loan for eligible homebuyers purchasing a home in New Jersey. The Homeward Bound Mortgage Program can be coupled with the NJHMFA Down Payment Assistance Program (DPA) which provides qualified homebuyers up to $15,000 toward down payment and/or closing costs.
• NJHMFA Police and Firemen Retirement System Mortgage: Active members of the police or fire station with one year of creditable service are eligible for this program. The maximum mortgage amount is $766,550. The interest rate is a 30-year fixed.

In summary

New Jersey may be a good home base for new homebuyers looking to engage with people from all walks of life, expand their culinary palate or find a hospitable community to raise their family. Your lifestyle, finances and goals play a big role when buying a home, and it’s imperative to ask yourself what you want and what you can afford before kicking off the process.

Start with the essentials. It’s a good idea to save for a down payment, determine your price range and get preapproved for a loan with favorable terms. If your down payment is less than 20% on a conventional loan or you get an FHA loan, you may have to pay for mortgage insurance. Contact a Home Lending Advisor today for more information.