New Jersey has emerged as the top state for home price growth in the U.S., significantly outpacing the national average despite a generally stalled housing market and high interest rates nationwide [1]. According to a recent report from Cotality, home prices in New Jersey climbed nearly 6% in February compared to the previous year, while the U.S. national average growth was just 0.5% during the same period [1]. Newark, in particular, recorded a 6.7% year-over-year price increase, the steepest among the 100 largest metropolitan areas in the country [1].
The surge in New Jersey's housing market is attributed to high-wage jobs and an influx of workers from Manhattan, especially those in finance, pharmaceutical, and biotechnology sectors, seeking more affordable living while maintaining transit access [1]. Housing supply in New Jersey remains well below pre-pandemic levels, with nearly 40% of homes being sold above asking prices, indicating strong demand and limited inventory [1].
Cotality's chief economist, Selma Hepp, noted that these trends reflect an ongoing process of price discovery and a market rebalancing locally rather than a national correction [1]. She also highlighted that while a decrease in mortgage rates before the spring homebuying season had raised hopes for a rebound in home prices and sales in 2026, a recent surge in rates has reduced demand, shifting expectations for a broader recovery this year [1].
In contrast, formerly hot markets such as Florida, Washington, D.C., and Montana are experiencing price corrections, with Florida seeing a drop of more than 2%, Washington, D.C. and Montana around 3%, and a total of 13 states recording outright price declines in February [1].
CONCLUSION
New Jersey's housing market is outperforming the rest of the country, driven by strong demand and limited supply, while other states face price declines. Despite hopes for a broader recovery, rising mortgage rates have dampened demand, suggesting continued local strength in New Jersey but ongoing challenges nationally. The market remains in a phase of price discovery and local rebalancing.