New Jersey suburbs grow increasingly unaffordable as prices surge past some NYC levels, report finds

New Jersey’s suburban housing market is no longer the affordable alternative to New York City it once was, as home prices surge past some city levels and erase a decades-old cost advantage, according to a new regional housing market analysis by the real estate data platform PropertyShark.

Over the past decade, suburban home values across the New York metro region and New Jersey have jumped 86%, roughly double the 43% increase seen in New York City.

That rapid growth has fundamentally reshaped the housing landscape, pushing suburban markets into higher price tiers and leaving fewer options for buyers seeking affordability outside the city.

Suburbs lose their price advantage

For generations, the suburbs offered a clear tradeoff: more space for less money. That equation has changed.

Nearly 100 suburban communities now have median home prices above $1 million, up sharply from about one in 10 markets a decade ago.

At the same time, the lowest-priced tier has disappeared entirely. No suburban markets remain below $250,000, and just 8% are priced under $500,000, compared with a majority of communities in 2016.

As a result, what was once a broad and accessible suburban market has consolidated into one dominated by mid- and high-priced homes.

Entry-level markets vanish

The most significant shift has been the disappearance of entry-level housing.

In 2016, about 61% of suburban communities were priced below $500,000, providing a wide range of options for first-time buyers and middle-income households. Today, that segment has shrunk to a small fraction of the market.

Communities that once served as stepping stones to homeownership have moved up the pricing ladder. Towns that previously offered homes in the $200,000 to $400,000 range now sit firmly in higher brackets, often exceeding $500,000 or more.

This shift has effectively eliminated the traditional “starter home” pathway that many buyers relied on.

Market shifts to higher price tiers

As lower-cost options have disappeared, suburban housing has become increasingly concentrated in higher price ranges.

About 43% of suburban markets now fall between $500,000 and $750,000, double their share from a decade ago. Another 49% exceed $750,000.

This widespread price growth reflects a structural change in the market, with increases occurring across nearly all communities rather than being limited to traditionally expensive areas.

Formerly mid-priced towns have moved into upper-tier categories, raising the baseline cost of entry across the region.

Pandemic accelerated demand and prices

The COVID-19 pandemic marked a turning point in the suburban housing market.

Increased demand for space, combined with remote work and low inventory, drove a surge in suburban homebuying. Prices climbed rapidly across the region, pushing many communities into higher price tiers in a short period.

By 2022, nearly all sub-$250,000 markets had disappeared, and many towns that once offered homes in the $300,000 and $400,000 range had crossed into the $500,000 and above categories.

Even after the pandemic, the upward trend has continued, with suburban home prices rising another 5% in 2025.

Buyers squeezed out of the suburbs

The rapid rise in suburban prices has reduced what buyers can afford outside the city, even as their budgets have increased.

In 2016, New York City’s median home price allowed buyers to purchase homes in about 68% of suburban markets. By 2025, that share had dropped to 56%, as suburban prices rose faster than city prices.

For buyers from lower-priced neighborhoods, the shift has been even more pronounced. In some cases, households in parts of the Bronx and Queens are now priced out of even the least expensive suburban markets.

The report notes that 14 neighborhoods in those boroughs are now less expensive than the cheapest suburb in the region, highlighting how the traditional pathway from city to suburb has narrowed dramatically.

A narrowing path to homeownership

The report describes a suburban market that has been “reordered,” with fewer entry points and greater competition at higher price levels.

Where buyers once had access to a wide range of communities at different price points, they now face a smaller pool of attainable options, often at significantly higher costs.

Even higher-income buyers are seeing their reach shrink. Manhattan buyers, for example, can now afford a smaller share of suburban markets than they could a decade ago, despite rising home prices in the borough.

A new normal for the region

The findings point to a broader shift in the relationship between cities and suburbs.

Suburban markets are no longer defined by affordability, but by mid-six-figure and seven-figure home prices. The long-standing expectation that moving out of the city will reduce housing costs no longer holds true in many cases.

Instead, buyers are increasingly forced to compete in higher price tiers or look farther from job centers to find more affordable options.

Without a significant increase in housing supply, the report concludes, affordability challenges are likely to persist, with the remaining lower-cost markets continuing to shrink as prices rise.