What Is the Average Cost of Living in New Jersey?

The cost of living refers to the money needed to cover basic expenses like housing, food, transportation, and healthcare. This metric helps determine the purchasing power of income in a specific area.

New Jersey’s General Cost of Living Landscape

New Jersey ranks among states with a higher cost of living compared to the national average. Its cost-of-living index stands around 114.2 to 119.8, indicating expenses are approximately 14% to 20% more expensive than the national benchmark. This elevated cost is influenced by its dense population and proximity to major metropolitan areas like New York City and Philadelphia. The state’s economic structure, with robust job markets in finance, pharmaceuticals, and technology, also contributes to higher prices.

Housing and property taxes primarily drive this higher expense level, exceeding national norms. However, the state also offers higher median household incomes, which can offset increased costs. Many find living in New Jersey justifiable due to its strong school systems, diverse communities, and access to employment and cultural amenities.

Breakdown of Major Living Expenses

Housing

Housing represents the most substantial portion of living expenses in New Jersey, with costs exceeding national averages. The statewide median home price reached approximately $565,000 in early 2025, higher than the national median. New Jersey’s housing costs are estimated to be between 36.4% and 44% above the national average. Rental costs reflect this trend, with the average rent across the state ranging from $2,310 to $2,426 for all property types.

Rental prices vary by location. For instance, a one-bedroom apartment averages around $3,811 in Jersey City, or $2,595 in Newark. More affordable options exist in areas like Lindenwold, with average monthly rent around $1,100. Proximity to major cities, local school district quality, and property type influence these costs, with homes near New York City commanding the highest prices.

Transportation

Transportation expenses in New Jersey include personal vehicle use and public transit costs. While gas prices in the state are comparable to or even below the national average, car ownership entails insurance and maintenance costs. For public transportation users, NJ Transit, operating extensive bus and rail services, implemented a 15% fare increase in July 2024, with additional 3% annual increases scheduled from July 2025.

A single ride on the PATH train, connecting New Jersey to New York City, costs $3.00. Monthly public transit passes can range from $100 to $300, depending on the distance and service type. An extensive public transit system offers an alternative to car-dependent living for many, especially those commuting to urban centers.

Food

Grocery expenses in New Jersey are higher than the national average, costing about 5.8% to 6% more. A single person spends approximately $295 per month on groceries. For a family of four, monthly grocery bills reach around $1,100.

Dining out also contributes to the food budget, with residents spending an average of $121.32 weekly on food prepared outside the home. Proximity to major metropolitan areas and the state’s higher cost of living influence these elevated food prices.

Utilities

Utility costs in New Jersey are above the national average, with monthly expenses for essentials like electricity, water, and heating averaging around $656.78. This is approximately 9.2% higher than the national average for these services. The average monthly electric bill is about $114.08 to $126.72, while water bills average around $72.00 per month.

Natural gas costs range from $50 to $100 per month. Internet services add $50 to $80 to monthly utility expenditures. Overall, utilities in New Jersey are estimated to be between 2% and 10% higher than the national average, adding to the cost of living.

Healthcare

Healthcare expenses in New Jersey are higher than in most other states. Average monthly health insurance premiums for individuals are just under $500, while family plans average around $1,483 per month. A benchmark Marketplace health plan costs $461 per month. Costs are influenced by the concentration of medical services and the state’s higher cost of living.

Out-of-pocket medical expenses can be substantial. A doctor’s visit ranges from $145 to $300 for those without insurance, and hospital stays are expensive, daily costs exceed $3,175. New Jersey’s healthcare spending for insured adults was 15% above the national average in 2021, and this gap has continued to widen.

The Impact of New Jersey Taxes

New Jersey’s tax structure influences the overall cost of living through its property, income, and sales taxes. These taxes are a component of the financial burden for residents. Understanding how they are applied is important for managing finances in the state.

Property Taxes

New Jersey has some of the highest property tax rates in the nation. The effective property tax rate in the state ranges from 2.21% to 2.4% of a home’s value, more than double the national average. These taxes are calculated based on the assessed value of the property and local municipal and school district budgets. The property tax burden impacts homeowners’ monthly expenses.

For example, on a median-priced home of $565,000, annual property taxes can amount to several thousand dollars. These high rates reflect the state’s commitment to funding public services, including its highly-ranked public school systems. While homeowners bear the direct cost, these taxes can also indirectly affect renters through increased rental prices.

Income Tax

New Jersey imposes a progressive state income tax on its residents, with higher income brackets subject to higher tax rates. The state’s income tax structure collects revenue based on taxable income. It applies to wages, salaries, and other income earned within the state.

Rates and brackets vary; residents should consult official state tax guidelines. Income tax contributes to the overall tax burden, as one of several revenue streams supporting state-funded programs and services. Impact on an individual’s budget depends on their earnings and filing status.

Sales Tax

New Jersey has a statewide sales tax rate of 6.625%. This rate applies to most goods and services purchased within the state. Unlike some states, New Jersey does not have additional local sales tax rates, except for Millville’s 2% additional sales tax.

Certain items are exempt, such as most food for home consumption, clothing, and prescription drugs. This broad application means a portion of consumer spending is subject to this levy, adding to daily living costs. The sales tax holiday for school supplies and sports equipment was repealed, and the sales tax exemption for zero-emission vehicles is being phased out.

Variations in Cost Across New Jersey Regions

The cost of living in New Jersey is not uniform across the state, with variations depending on the region. These differences are driven by factors such as proximity to major urban centers, local amenities, and job markets. Understanding these disparities is important for those considering relocation within the state.

Northern New Jersey, particularly counties closest to New York City (e.g., Bergen and Hudson), experiences the highest costs. Jersey City and Hoboken are among the most expensive, with median home prices and rental rates above the state average due to direct access to Manhattan and robust job markets. Upscale towns like Alpine, Short Hills, and Deal also feature expensive real estate, attracting residents seeking luxury homes and top-tier school systems.

Central New Jersey, including counties like Middlesex and Monmouth, offers a more balanced cost of living. While still elevated compared to the national average, these regions provide a compromise between affordability and accessibility to both New York City and Philadelphia. Housing prices in these areas fall within a mid-range, attracting families and professionals seeking suburban environments with good amenities.

Conversely, Southern New Jersey, including counties like Atlantic, Camden, and Cumberland, is more affordable. Cities like Camden, Vineland, and Trenton offer lower median home prices and rental costs compared to northern parts of the state. These areas may appeal to those seeking a lower financial burden, though they might involve longer commutes to employment hubs.