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The basics:

• Realtor.com ranks New Jersey with D grade for housing availability, affordability
• State dropped eight spots year over year to No. 43
• Low housing production continues to hurt affordability
• Jersey City stands out with robust apartment construction

When it comes to keeping pace with housing availability and affordability, New Jersey is just barely making the grade, according to Realtor.com.

The Garden State earned distinction in the Affordability & Homebuilding Report Cards—2026 Update for one of the biggest drops from its last iteration. This state, along with Maryland and Alabama, tied for falling the farthest year over year (eight spots). New Jersey went from No. 35 to No. 43 and received a “D” grade.

The letter grade comes as the state seeks to improve housing production to catch up with demand and a deficit of 200,000 affordable homes. And at the same time, the just-passing mark contrasts local housing hotspots, such as Jersey City along the in-demand Gold Coast, that show what can happen when the balance is right.

In New Jersey, Realtor.com noted strong incomes, “but inadequate construction and a steep … new-construction premium.” Nearby Connecticut and New York each received F grades, while Pennsylvania earned the highest mark (C) in the Northeast.

Indiana rose from No. 4 last year to the No. 1 spot on this year’s Affordability & Homebuilding Report Cards. According to the report, every state to earn an A or B letter grade is in either the South or Midwest.

The states scoring the highest marks receive a boost from structural advantages that in turn affect affordability. Available grades run from A+ to F, though Realtor.com notes no state has earned the highest mark, “a reminder that even the strongest performers have room to improve.”

The recipe for success? “More permissive zoning, streamlined permitting, and incentives for competitively priced new construction are the curriculum for improvement,” according to Realtor.com. “All levels of government, as well as private community organizers, should focus on removing the barriers to homebuilding that have created the current predicament.”

A bright spot

In contrast, Jersey City continues to build with reportedly more than 10,000 apartments under construction.

“Housing affordability is directly tied to the supply of housing. New Jersey took a critical first step forward in encouraging more home building several years ago with a new law mandating affordable housing construction,” Jersey City Apartment Owners Association Executive Director Wendy Paul told NJBIZ. “As new homes become available New Jersey’s housing affordability will improve, though more needs to be done to make it less expensive to reside here.

“Nonetheless, New Jersey is ahead of New York. You only need to look to Jersey City for proof of this as the city’s significant new housing has led to more competitive pricing for residents.”

You only need to look to Jersey City for proof of this as the city’s significant new housing has led to more competitive pricing for residents.
—Wendy Paul, executive director, JCAOA

While the Hudson County hotspot has held distinction in recent years for its nation-leading rental rates and deliveries, recent adjustments have helped to reset expectations. Tenants are also receiving more concessions and incentives amid an increase in vacancy over this time period.

According an analysis of Costar data, the Jersey City waterfront on its own has more than 6,600 apartments at work. Jersey Digs reported that figure represents a 28% increase over existing inventory. It also places the neighborhood in the top spot for highest construction-to-inventory ratio across the 52 multifamily submarkets in the New York area, the publication said.

Meanwhile, New York posted one of the lowest building intensities relative to population, according to Realtor.com. The report card noted a 17% year-over-year permitting drop in that state.

For now, Jersey City offers an example of the impact of supplying adequate housing options. Looking ahead, the city and the state will contend with rising costs, permitting bottlenecks and increased fees, testing whether the private and public sectors can sustain the pace of homebuilding necessary to improve affordability.