Home Prices In NJ Skyrocketed In 2022: New Data

NEW JERSEY — After home prices spiked over the past year, New Jerseyans are having a harder time buying a house than at any point in the last 15 years, according to a recently released home affordability report.

The 2022 U.S. Home Affordability Report showed potential home buyers face significant financial obstacles across the United States amid rising home prices and interest rates as well as straggling wage growth.

The report, released by real estate data company ATTOM, found median-priced single-family homes and condos were less affordable in the second quarter of this year compared to historical averages in 560 of 575 counties with data available. That’s more than 97 percent of all counties measured, up from 69 percent in the second quarter of last year.

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In New Jersey, homes are not only less affordable than a year ago but less affordable than last quarter — based on a comparison of the average annual wages and the annual wages required for major homeownership expenses, according to ATTOM’s Affordability Index.

ATTOM's report shows affordability data in 17 New Jersey Counties. Here are their median-sale prices from April through June, along with how much less affordable they've become since the beginning of this year and during that period last year:

• Atlantic: $255,000 median price, 16 percent less affordable than the second quarter of 2021, 11 percent less affordable than the first quarter of this year
• Bergen: $575,000 median price, 17 percent less affordable than the second quarter of 2021, 10 percent less affordable than the first quarter of this year
• Burlington: $289,900 median price, 26 percent less affordable than the second quarter of 2021, 14 percent less affordable than the first quarter of this year
• Camden: $243,750 median price, 22 percent less affordable than the second quarter of 2021, 8 percent less affordable than the first quarter of this year
• Cumberland: $197,400 median price, 26 percent less affordable than the second quarter of 2021, 17 percent less affordable than the first quarter of this year
• Essex: $475,000 median price, 26 percent less affordable than the second quarter of 2021, 17 percent less affordable than the first quarter of this year
• Gloucester: $255,000 median price, 19 percent less affordable than the second quarter of 2021, 10 percent less affordable than the first quarter of this year
• Hunterdon: $425,000 median price, 12 percent less affordable than the second quarter of 2021, 14 percent less affordable than the first quarter of this year
• Mercer: $280,000 median price, 11 percent less affordable than the second quarter of 2021, 10 percent less affordable than the first quarter of this year
• Middlesex: $405,000 median price, 16 percent less affordable than the second quarter of 2021, 11 percent less affordable than the first quarter of this year
• Morris: $525,000 median price, 19 percent less affordable than the second quarter of 2021, 17 percent less affordable than the first quarter of this year
• Ocean: $299,444 median price, 24 percent less affordable than the second quarter of 2021, 15 percent less affordable than the first quarter of this year
• Passaic: $425,000 median price, 18 percent less affordable than the second quarter of 2021, 10 percent less affordable than the first quarter of this year
• Somerset: $475,000 median price, 10 percent less affordable than the second quarter of 2021, 12 percent less affordable than the first quarter of this year
• Sussex: $303,500 median price, 19 percent less affordable than the second quarter of 2021, 6 percent less affordable than the first quarter of this year
• Union: $460,000 median price, 17 percent less affordable than the second quarter of 2021, 13 percent less affordable than the first quarter of this year
• Warren: $300,000 median price, 23 percent less affordable than the second quarter of 2021, 12 percent less affordable than the first quarter of this year

ATTOM also included an Affordability Index. ATTOM’s calculations assumed a 20 percent down payment and that households would not be spending more than 28 percent of their income on mortgage payments, property taxes and insurance. An index below 100 indicates that housing is less affordable in that county compared to historical averages.

Here's the Affordability Index of each listed New Jersey county:

• Atlantic: 84
• Bergen: 91
• Burlington: 89
• Camden: 86
• Cumberland: 77
• Essex: 86
• Gloucester: 83
• Hunterdon: 98
• Mercer: 100
• Middlesex: 87
• Morris: 98
• Ocean: 76
• Passaic: 85
• Somerset: 92
• Sussex: 92
• Union: 84
• Warren: 87

The share of counties that are historically less affordable is at its highest point since 2007, just before the Great Recession, according to the report.

The median national home price increased 16 percent last year, trending up for the 11th straight year. But average annual wages didn’t keep pace, increasing just 6 percent.

In the 17 New Jersey counties that ATTOM analyzed, only three — Cumberland, Camden and Mercer Counties — had a higher average annual wage than the amount needed to afford a typical home in their areas, according to the report.

Here's how much is necessary to make a year to afford a typical home in each county, along with each county's average annual earnings (wage data from the U.S. Bureau of Labor Statistics):

• Atlantic: $62,396 needed for a house, $54,535 in average annual wages
• Bergen: $144,388 needed for a house, $75,686 in average annual wages
• Burlington: $75,236 needed for a house, $66,833 in average annual wages
• Camden: $66,351 needed for a house, $63,765 in average annual wages
• Cumberland: $52,137 needed for a house, $52,442 in average annual wages
• Essex: $123,567 needed for a house, $80,275 in average annual wages
• Gloucester: $68,497 needed for a house, $53,027 in average annual wages
• Hunterdon: $109,901 needed for a house, $71,292 in average annual wages
• Mercer: $72,905 needed for a house, $82,564 in average annual wages
• Middlesex: $103,278 needed for a house, $74,880 in average annual wages
• Morris: $131,714 needed for a house, $96,460 in average annual wages
• Ocean: $91,461 needed for a house, $51,805 in average annual wages
• Passaic: $112,533 needed for a house, $61,087 in average annual wages
• Somerset: $118,519 needed for a house, $99,138 in average annual wages
• Sussex: $80,010 needed for a house, $53,222 in average annual wages
• Union: $118,565 needed for a house, $78,988 in average annual wages
• Warren: $78,870 needed for a house, $55,770 in average annual wages

The median national home price reached an all-time high of $349,000, and the portion of average wages required to buy a house has risen to 31.5 percent — well above the recommended 28 percent. The portion of average wages needed for monthly home payments has risen at the fastest rate, measured from the first quarter of 2022 and over the past year, since at least 2000, according to the report.

Homes remained relatively affordable during the COVID-19 pandemic and over the last few years despite high prices due to historically low mortgage rates, said Rick Sharga, executive vice president of market intelligence at ATTOM.

But significantly rising mortgage rates have strained potential homebuyers, saddling them with monthly mortgage payments between 40 and 50 percent higher than they were even a year ago, Sharga said.

“Payments that many prospective buyers simply can’t afford,” Sharga said.

The counties with the lowest housing affordability indexes in the country in the second quarter of 2022, along with their scores are:

• Clayton County, Georgia (47)
• Canyon County, Idaho (48)
• Rankin County, Mississippi (48)
• Maury County, Tennessee (49)
• Pinal County, Arizona (49)

Harrison County, Mississippi, had the largest year-over-year decrease in its affordability index, which dropped 42 percent from 117 in the second quarter of 2021 to 68 in the latest report. Clayton County, Georgia, also fell 42 percent from 81 to 47.

Other key findings in the report include:

• 40 percent of the counties studied require at least an average annual salary of $75,000 to afford a typical home, according to the report.
• Home prices are up at least 10 percent over the past year in 65 percent of the counties in the report.
• Home price increases outpaced wage growth over the past year in over 90 percent of counties.
• Every county except two of those analyzed saw an increase in the portion of average wages that went toward typical housing expenses both quarterly and year-over-year.