We all remember the jitters we'd get in school as report card time came around, nervous about whether our performance was good enough to earn us high marks.
Turns out these documents don't just apply to academics, but to real estate too. New Jersey just received its latest housing market report card — and it's not looking too good.
In Realtor.com's latest report, it issued a grade for all 50 U.S. states and the District of Columbia based on how well they're addressing housing affordability and homebuilding. These grades, ranging from an A+ to an F, were based on four key metrics relating to affordability and new construction in 2024.
"It has become harder and harder to become a homeowner, with high prices and mortgage rates remaining the unfortunate reality, and increasing the supply of homes is the clear solution," the report reads. "States have a clear mandate to address housing affordability, so we are assigning grades based on how they are doing now and how well they are address the future by building affordable homes."
With a total score of 45.5, New Jersey received a C-minus in the report. This falls in line with the grades that were seen throughout the Northeast, which were all in the C range or lower.
Statewide, New Jersey had a median listing price of $563,048 and a median household income of $96,278 in 2024, according to Realtor.com. Assuming a 10% down payment and a mortgage rate of 6.75%, and not including other costs like property taxes and insurance, the report estimates that New Jersey homeowners typically spend more than the suggested 30% of their median annual income on the state's median-priced home.
The Garden State was also given an affordability score of 0.58 in the report. This number —which can range from 0 to 2, with 0 being the lowest — came from Realtor.com's Affordability Distribution Curve, which assesses how many of the state's home listings are affordable for those in a certain income percentile.
As for homebuilding, the number of new-home construction permits issued in the Garden State in 2024 made up just 2.5% of the total permits issued nationwide. And with the state accounting for about 2.8% of the country's total population, the report considers New Jersey to have a weak permit-to-population ratio due to its lack of homebuilding relative to its population.
"We use this ratio to show which states are pulling their relatively weight when it comes to addressing the shortage of homes across the country by building more," the report reads.
The state also has a high new construction premium, or the percentage difference between the list price of a newly built home versus an existing home, at 74.1%. This is among the highest in the report, indicating that a new construction home in New Jersey typically comes with a much higher price tag than an existing home, according to the report.
Overall, Realtor.com did not give any states an A-plus. But several states did receive a grade in the A range, including South Carolina, Texas and Iowa. On the other end, five states received an F grade, including four in the Northeast: California, Oregon, New York, Massachusetts, Connecticut and Rhode Island.
"States that are serious about addressing the housing affordability crisis should take notes instead from South Carolina, Texas and Iowa. More permissive local zoning and a focus on delivering competitively priced new inventory are the curriculum for 2025 and beyond," the report reads.
Source: northjersey.com
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