In 2024, the average age of a first-time homebuyer in New Jersey rose to an all-time high of 45, according to Corbelo Law. This marks a significant shift, as rising costs, high competition, and limited inventory make it increasingly difficult for younger New Jerseyans to enter the housing market. Factors such as low housing supply, rising rents, and competition from wealthier buyers are contributing to this trend, pushing the average age of first-time buyers even higher than the national median of 38 years.
Older First-Time Homebuyers: A Growing Trend in New Jersey
New Jersey’s real estate market reflects the larger trend of delayed homeownership but at an even more pronounced rate. While in the 1980s, the typical first-time homebuyer was in their late 20s, today’s buyers are often well into their 40s. The share of first-time homebuyers has also declined, with New Jersey seeing fewer young buyers due to the high cost of entry and limited availability of affordable homes.
New Jersey’s Housing Shortage and Rising Prices
New Jersey’s housing shortage is a primary factor in the delayed entry of first-time buyers. With a persistent gap in new home construction, especially in high-demand areas like Bergen, Essex, and Hudson Counties, home prices continue to climb. Currently, the median price of a starter home in New Jersey stands at about $340,000, much higher than the national average of $250,000. This pricing pressure is compounded by increased demand, as more buyers enter bidding wars, often competing against wealthier or cash buyers.
Cash Buyers Increase Pressure on First-Time Buyers
The presence of cash buyers, many of whom are baby boomers or retirees with significant equity, adds another layer of competition. Around 26% of all home purchases in the U.S. this year were paid in cash, a trend that holds in New Jersey, particularly in desirable locations along the Jersey Shore. These cash offers often make it difficult for younger buyers who rely on mortgages to compete.
High Rent Costs Hinder Savings for New Jersey Renters
For New Jersey renters, high costs continue to be a barrier to homeownership. In cities like Jersey City and Hoboken, rent growth during the pandemic outpaced wage increases, with the average renter spending about 34% of their income on rent. These elevated costs make it challenging for renters to save enough for a down payment, effectively delaying their ability to purchase a home.
Building Activity Shows Limited Improvement
While New Jersey is experiencing a slight increase in building activity, it remains insufficient to meet the high demand for housing. Single-family housing starts have seen a modest rise, particularly in suburban and exurban areas, which aligns with national data showing a 2.7% increase in September 2024. However, the slow pace of new construction continues to restrict housing options for first-time buyers, exacerbating affordability issues.
The Road Ahead for First-Time Homebuyers in New Jersey
With first-time homeownership increasingly delayed, experts anticipate that the trend of older first-time buyers will continue. Addressing the housing supply crisis is essential to providing younger generations with viable entry points into homeownership. Steps such as adjusting zoning regulations, incentivizing affordable housing projects, and encouraging the construction of multi-family units could improve accessibility for aspiring homebuyers in New Jersey.
Until such measures are implemented, many potential homebuyers will remain renters, and the dream of homeownership may be delayed for even longer for younger New Jerseyans. This trend could have lasting implications, impacting the overall stability and growth of New Jersey’s housing market and the economic futures of younger generations in the state.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
Connect with Ralph on LinkedIn: https://www.linkedin.com/in/ralphaponte/