Rent vs buy in New Jersey
Based on today's numbers over 7 years, buying comes out ahead in only 2 of its 17 cities of 50,000+, with renting taking the other 15.
New Jersey cities: rent or buy
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|---|---|---|---|---|
| Newark | Rent | renting wins by $74k | none in 30 years | $480,494 | $2,111 |
| Paterson | Rent | renting wins by $163k | none in 30 years | $540,919 | $1,889 |
| Clifton | Rent | renting wins by $106k | none in 30 years | $608,762 | $2,605 |
| New Brunswick | Buy | buying wins by $23k | year 6 | $439,421 | $2,820 |
| Plainfield | Rent | renting wins by $105k | none in 30 years | $516,503 | $2,191 |
Sources: Zillow Home Value and Observed Rent indexes. Verdicts come from our rent vs buy method, which compares renting with buying at 20% down over 7 years.
New Jersey verdict
Over a 7 year span, renting comes out ahead in 15 of the 17 biggest cities in New Jersey. A $575k typical home value is what you'll face. Renter households number 1,268,573. Their median rent of $1,720 a month is higher than the $1,413 US level. In Newark, buying runs $480,494, while renting costs $2,111 each month. Buying never reaches break even in 30 years here, while renting gains $74k over 7 years. Paterson sees renting ahead by $163k, where the home is $540,919 and rent is $1,889.
We see buying win only where rent sits high next to home prices. In Camden, a typical home costs $149,376, and monthly rent comes to $1,787. Over 7 years, buying wins by $77k, and the break-even point arrives in year 2. In New Brunswick, buying leads by $23k, where a $439,421 home with $2,820 rent reaches break even in year 6. To beat $4,005 rent, an $894,141 home in Hoboken takes until year 12.
Statewide costs turn owning a home into a slow climb for you. The property tax rate you pay, 2.11%, is more than twice the 0.94% US rate. On homeowners insurance, you save a bit at $1,280 a year compared with $1,308 nationally. Over the last 10 years, home prices grew 6.8% a year, yet high taxes still slow how fast you get your money back. Statewide, 36% of households rent, while the national figure is 35%.
Our take: renting leaves you ahead in nearly every big city in New Jersey. Shopping in Camden or New Brunswick is the only case where we'd buy for a 7 year stay.