Is New Jersey Expensive to Live In?

New Jersey is widely perceived as an expensive place to live, a notion supported by various economic indicators. This article explores the specific components that contribute to these expenses, providing a clearer picture of what residents can expect to allocate for housing, taxes, daily necessities, and other significant costs.

Housing Market Realities

New Jersey’s housing market reflects a significant premium, with its housing index approximately 36.4% higher than the national average. The statewide median price for single-family homes reached $565,000 in early 2025, representing a substantial increase from the previous year. This active market is driven by consistent demand, particularly in suburban areas offering commuting access to major metropolitan centers like New York City.

Rental costs also contribute to the housing burden, with the median gross rent in New Jersey recorded at $1,667 in 2023. This figure positions the state’s rental expenses among the highest in the nation. Factors such as population density, limited land availability, and a strong economy contribute to elevated property values and rents across the state. Desirable neighborhoods, often characterized by strong school districts and proximity to amenities, also command higher prices for both purchase and rental properties.

Despite these elevated costs, housing prices vary considerably across different regions within New Jersey. For instance, more affordable options can be found in cities such as Trenton and Atlantic City, where home prices remain below the statewide median. This regional diversity means that while the overall state average is high, specific locations might offer more accessible housing options. Even with these variations, housing remains the most substantial component of living expenses for many New Jersey residents.

The Tax Landscape

New Jersey is recognized for its substantial tax burden, consistently ranking among the states with the highest overall tax rates. Residents pay an average of $15,032 in state and local taxes annually, which is significantly higher than the national average. A major contributor to this burden is the property tax, which is calculated based on a property’s assessed market value and the local tax rate set by each municipality.

As of 2025, New Jersey’s average property tax rate stands at 2.23%, making it the highest in the United States. This means a home valued at $400,000 could incur an annual property tax bill of approximately $8,920. These funds are primarily used to support local schools, municipal services, and county government functions.

The state also operates a progressive income tax system, with rates for the 2024 tax year ranging from 1.4% to 10.75%. The highest rate of 10.75% applies to taxpayers with taxable income exceeding $1 million. Additionally, New Jersey has a sales tax rate of 6.625% which applies to most goods and services. The state also imposes an inheritance tax, though it does not have an estate tax.

Daily Living Expenses

Beyond housing and taxes, daily living expenses in New Jersey also tend to be higher than national averages. Grocery costs, for example, are about 5.8% more expensive than the national average. A single adult in New Jersey might budget around $286 to $295 monthly for groceries.

Utility expenses, encompassing electricity, gas, water, and internet services, are roughly 2% higher in New Jersey compared to the national average. Transportation costs present a mixed picture; while gasoline prices can sometimes be lower than the national average, other transportation-related expenses can be significant. For instance, the average annual cost for full coverage car insurance in New Jersey is around $3,027, and $1,316 for minimum coverage.

Public transportation is an option for many, particularly for commuters, given the state’s extensive transit system connecting various areas. This can offer an alternative to personal vehicle reliance, potentially reducing some transportation costs. However, overall daily expenditures for necessities contribute to the state’s elevated cost of living.

Other Key Costs

Healthcare expenses represent another considerable cost for New Jersey residents. The average monthly premium for individual health insurance is just under $500, while family premiums can average around $1,483 per month. The average annual cost for health insurance per person in the state is approximately $8,130, which surpasses the national average. Out-of-pocket costs can also be high, with an average emergency room visit costing around $3,750 and hospital stays exceeding $3,175 daily.

Education costs also factor into the financial landscape. Public school funding is heavily reliant on local property taxes, indirectly impacting homeowners through higher tax bills. For those pursuing higher education, the average tuition and fees for in-state students at New Jersey public colleges are about $16,068 for the 2024-2025 academic year. Out-of-state students face higher costs, averaging $27,014 for the same period.

Childcare expenses are particularly high in New Jersey, which ranks among the most expensive states for childcare. The average annual cost for infant care can reach approximately $19,634, while care for a four-year-old averages around $17,002 annually. These significant costs can place a considerable financial strain on families with young children.