In this Market Update, we review the latest housing data from May 2025, highlighting key developments across six counties: Bergen, Morris, Passaic, and Sussex in New Jersey, and Orange and Rockland in New York. We then forecast market conditions for June and July 2025, examining trends in inventory, prices, and buyer competition in each county. Finally, we look ahead to the broader 6-month horizon, offering insights on mortgage rates, supply constraints, and emerging buyer and seller dynamics. Whether you’re planning to buy, sell, or just keep tabs on the market, this report will help you navigate current conditions—and what may lie ahead.

Summary of the May Market Data & Trends

High Mortgage Rates, Slightly Better Affordability

Thirty-year fixed mortgage rates ended May at 6.9 percent, firmly in the high-6 percent band where they have hovered since mid-April. Although that’s a full percentage point below the 7.8 percent peak of late 2023, financing costs remain the chief brake on affordability. The National Association of Realtors’ Housing Affordability Index ticked up to 102.5 in Q1 2025 as winter price softness and modest wage growth narrowly offset higher rates; HUD’s Rental Affordability Index likewise improved to 105.4. Both gauges, however, sit only a hair above the 100-point breakeven line, underscoring that households still face stretched monthly payments.

Consumer Sentiment Climbs

Fannie Mae’s Home Purchase Sentiment Index rose to 73.5 in May, its best reading of 2025. Five of six measurements saw improvement—buyers and sellers grew more upbeat, job-loss fears eased, and more respondents expect stable or lower rates. The lone point of weakness was household income sentiment, hinting that wage growth has not fully kept pace with housing costs. Even with the uptick, the index remains well below pre-2020 highs in the 80s–90s, reinforcing the idea that many families still view current conditions as difficult.

A Look at May Sales Activity

May’s sales data confirm an uneven market: Rockland, Bergen and Morris posted inventory shortages that pushed closed transactions down. Demand spilled into more affordable counties like Orange, Passaic and Sussex:

  • Bergen County (NJ): 419 closed sales, (-8.5% YOY)
  • Morris County (NJ): 301 closed sales, (-8.0% YOY)
  • Passaic County (NJ): 154 closed sales, (+4.1% YOY)
  • Sussex County (NJ): 148 closed sales, (+2.1% YOY)
  • Orange County (NY): 186 closed sales, (+1.6% YOY)
  • Rockland County (NY): 113 closed sales, (-4.2% YOY)

Overall, May 2025 reveals a market that is more stable than a year ago yet still grappling with the twin constraints of high borrowing costs and chronically thin home supply.

Forecast (June and July 2025)

Looking ahead to June and July 2025, we provide detailed forecasts for each of the six counties on key market indicators: Active listings, New listings, Median sale price, Sale-price to list-price ratio, and Days on Market (DOM). Each forecast is derived from a data-driven modeling process, incorporating seasonal trends, market momentum, and statistical relationships.

Bergen County, NJ:

  • Inventory: Active single-family listings stood at 968 (+2.0% YoY) in May. A typical late-spring bump should lift inventory into the low-1,000’s in June, then hold flat or ease slightly by July as leftover spring stock clears. New-listing flow was 764 in May (-4.7% YoY) and is expected to hover around 750-800 per month through July because most owners remain “rate-locked” into sub-4% mortgages.
  • Prices: May’s median sale price hit a near-record $850k (+3.0% YoY). Limited supply and peak-season demand could nudge June into the $860k range, but affordability ceilings should cap appreciation. Our models point to flat-to-modest 2–4% YoY gains by July, keeping the median in the mid-$800k’s rather than repeating last year’s double-digit jumps.
  • Competition & Market Speed: Homes still command premiums: the sale-to-list ratio averaged 105.1% in May. Expect it to remain elevated—about 105% in June and 102-104% in July—unless an unexpected wave of listings materializes. Market pace is brisk: DOM averaged 28 days in May and could tighten to 25-27 days in June before drifting back toward 30 days by July. Overall, Bergen stays a clear seller’s market through mid-summer.

Morris County, NJ:

  • Inventory: Active listings were 591 in May (-3% YoY). Seasonal flow should lift stock into the low-600’s by June, then flatten or slip in July as new-listing volume (≈500–550 per month) barely offsets rapid absorption; months’ supply stays near two.
  • Prices: The May median reached $768k (+2.4% YoY). Ultra-tight supply and affluent demand are likely to nudge values toward $780k–$800k by July, keeping year-over-year appreciation in a restrained 3–5% range rather than the double-digit gains of 2024.
  • Competition & Market Speed: Morris remains the region’s hottest seller market: homes fetched 107.1% of list in May and should stay 106–108% in June, easing only to ≈ 105% by July unless unexpected inventory relief emerges. Days on market are minimal—24 days in May—and should hover around 20–25 days in June and the mid-20s in July, meaning most well-priced properties still go under contract within a week or two. Buyers must act quickly; sellers retain firm leverage through mid-summer.

Passaic County, NJ:

  • Inventory: Active listings remain scarce—345 in May (-0.9% YoY). Seasonal churn may lift stock into the high-300’s in June, then slip toward the mid-300’s by July as absorbed spring inventory outweighs fresh supply. New listings should reach ≈300–320 in June and fall back to the mid-200’s in July, leaving months’ supply near two and preserving tight conditions.
  • Prices: May’s median hit $600k (+9% YoY), reflecting spill-over demand from pricier Bergen and Morris. Expect values to edge into the $615–$625k range in June and hold around $610k in July, with year-over-year gains easing to the high-single digits as affordability bites.
  • Competition & Market Speed: Homes sold for 106.5% of list in May; bidding wars should keep the ratio ≈107% in June and 105–106% in July. Market pace stays swift: DOM averaged 36 days in May and may compress to ≈30 days in June, then drift back toward 35–40 days as summer inventory builds. Bottom line—Passaic remains a strong seller’s market through mid-summer, with buyers routinely paying above ask and needing to act within weeks.

Sussex County, NJ:

  • Inventory: Active listings were 384 in May (+9% YoY). Modest growth should lift stock into the low-400’s by June and roughly ≈420 by July, still lean by pre-2020 standards. New-listing flow (263 in May) is likely to crest near 280–300 in June before slipping to low-200’s in July, nudging months’ supply toward—but not past—four.
  • Prices: May’s median reached $458k (+9% YoY) as ex-urban space and relative affordability kept buyers engaged. Expect values to climb into the $470–$480k range in June and flirt with $490k+ by July, sustaining high-single-digit annual gains unless inventory swells faster than sales.
  • Competition & Market Speed: Homes sold for 103.8 % of list in May; offers should average ≈102–104% in June and cool toward 100–101% in July as choice improves. Market tempo remains brisk: DOM averaged 35 days in May, may compress to ≈30–33 days in June, then drift to ≈40–45 days with mid-summer inventory accumulation. Bottom line—Sussex edges slowly toward balance but will stay a seller-tilted market through July, with well-priced homes still moving in a few weeks and achieving slight asking price premiums.

Orange County, NY:

  • Inventory: Supply is loosening. 857 actives in May (+5% YoY) should push into the 900’s in June and ≈1,000 by July as new-listing flow (421 in May, +10% YoY) stays brisk at ≈420–450 in June and ≈400 in July. Months’ supply could edge from about three to ≈four by late summer—still tight historically, but giving buyers more choice than in 2024.
  • Prices: May’s median was $450k (+1% YoY). Added supply plus solid but not frantic demand point to flat-to-slight gains: $455k–$460k in June and similar in July, keeping year-over-year change near zero. Orange thus enters a plateau phase rather than a new price surge, supported by its relative affordability within the metro.
  • Competition & Market Speed: Negotiations are normalizing; sale-to-list ratios should hover ≈99–101% (about list price) through July. DOM averaged 61 days in May and is expected to oscillate in the 55–65 day range this summer. Buyers gain modest leverage, while sellers must price intelligently to secure timely offers.

Rockland County, NY:

  • Inventory: Supply is finally swelling. 475 active listings in May marked a +26% YoY jump; new listings leapt 24% to 292. Expect stock to top ≈510 in June and ≈550 by July, lifting months’ supply toward 3–4 and giving buyers more choice than at any point since 2021.
  • Prices: May’s median dipped to $750 k (-3.8% YoY) as extra inventory curbed bidding power. Forecasts call for a flat-to-soft $740–$760k band in June–July, translating to 0% to -5% YoY.
  • Competition & Market Speed: Negotiations are normalizing: the average sale now lands ≈99–101% of list, and could slip just under 100% by late summer if listings keep outpacing sales. Market tempo is cooling as well—DOM held at 40 days in May but is projected to stretch to ≈45 days in June and ≈50 days by July, the longest among the six counties. Sellers must price realistically and expect more back-and-forth; buyers gain leverage yet still face historically tight—but rapidly balancing—conditions.

6 Month Regional Market Outlook (June–November 2025)

Looking beyond the immediate summer, the next six months (through November 2025) in the Greater New York/New Jersey housing market will likely be characterized by gradual normalization under persistent macroeconomic crosscurrents. We anticipate a moderating but still active market across the region, influenced by broader economic trends such as interest rates and the trajectory of the economy, as well as seasonal patterns and local supply-demand dynamics.

  1. Mortgage Rates & Affordability: Over the next six months the region’s housing market is set to drift toward equilibrium rather than pivot sharply. The cornerstone of this outlook is an interest-rate backdrop that remains stubbornly high: forecasters from Fannie Mae and the New York Fed see the 30-year fixed mortgage oscillating between roughly 6½ and 7 percent through autumn, finishing 2025 only a few tenths lower. That plateau preserves the rate-lock effect—owners with pandemic-era 3 percent loans continue to sit tight—and keeps the affordability index under pressure despite steady job growth and tempering inflation. Unless a recession or a rapid drop in CPI forces the Federal Reserve to cut more aggressively, financing costs will remain a headwind for both buyers and would-be sellers.
  2. Inventory Projections: Seasonal listing momentum should nonetheless push active inventory to an annual high in July or August. Rockland, Orange and Sussex counties are already posting double-digit year-over-year gains in homes for sale, and by late summer each could carry three to four months of supply. Bergen, Morris and Passaic will likely see only single-digit increases, leaving them near a two-month cushion that still favors sellers. New construction will add modestly, but land constraints and local zoning mean the region remains undersupplied. After Labor Day the usual wave of cancelled or withdrawn listings will thin choices again, so buyers who delay into late autumn will find the cupboard leaner, though not as bare as in 2023.
  3. Sales Volume: Transaction volume should edge higher, helped by a brief inventory swell, yet remain well below 2016-2019 norms. Demand is still capped by debt-to-income hurdles and sparse new construction, so without a break below the 6 percent mortgage threshold the market is likely to grind rather than surge. North-Jersey suburbs, with their commutability and school districts, will preserve stronger baseline demand, whereas Rockland and Orange—more dependent on price-sensitive buyers—will feel rate shifts more acutely.
  4. Home Prices & Market Balance: Price behavior will diverge. In Bergen, Morris, Passaic and Sussex—where supply lags demand—median values should creep another two to five percent above last year by November, and sub-$800 k listings will keep drawing multiple offers. Rockland’s sudden inventory jump and Orange’s steady listing growth are already reversing bidding leverage; both counties are expected to finish autumn anywhere from flat to three percent lower than a year earlier. Region-wide a hard correction appears unlikely: borrowers hold record equity, lending standards are sound, and unemployment remains low. Instead, the pattern will be a plateau with slower weekends at open houses, and list-to-sale ratios sliding toward parity. Negotiation dynamics will reflect that cooling. By late summer, homes in Bergen and Morris will close around two-to-three percent over asking, Passaic and Sussex one-to-three percent, while Rockland and Orange gravitate to full price or a modest discount.

Wildcards could upset this glidepath. A faster-than-expected plunge in inflation could drag mortgage rates closer to six percent and reignite demand; a flare-up in prices or geopolitics could push rates above seven and chill activity. A sudden labor-market stumble would curb prices fastest in discretionary segments such as luxury and second-home stock, while any new federal buyer subsidy or change to the SALT deduction could tilt demand locally. Barring such shocks, the most probable scene in November is a market that has inched nearer to balance: sales volumes a bit higher than last winter yet still thin, prices generally flat and inventory improved but tightening again as the holidays draw near. Sellers will still hold an advantage in many neighborhoods, just not the overwhelming leverage of 2021–2023. Buyers, meanwhile, will find slightly more negotiating power—incremental but welcome progress toward a sustainable equilibrium.

Forecast Methodology

These forecasts are based on time-series models and regression analysis applied to county-level housing data, capturing seasonal patterns and key market relationships like inventory, pricing, and days on market. Broader factors—such as mortgage rate forecasts, employment trends, and buyer sentiment (e.g., Fannie Mae HPSI)—were included to improve accuracy. Forecasts assume no major economic or policy shocks and reflect a baseline of gradual normalization. We also validated projections against recent weekly trends to ensure alignment with evolving market conditions.

Final Thoughts

The Greater NY/NJ market is settling into a “slow-normalization” phase that should persist through Thanksgiving. Mortgage rates lodged in the mid-6 percent range keep affordability tight and discourage many owners from trading up, yet seasonal inventory gains are gradually restoring balance. We expect the region to echo late-cycle 2018-19 conditions rather than the pandemic frenzy.

Policy and macro risks remain swing factors. A surprise inflation break could shave half a point off mortgage costs and re-ignite demand; conversely, another energy-driven price spike or labor-market stumble would tilt the scales toward buyers more quickly. Barring such shocks, the outlook is for a steady grind: thin, but gradually rising inventory; stable to mildly rising prices in NJ; a plateau or slight easing in NY; and sales volumes ticking up only modestly from spring lows.

Advice for Buyers

  • Shop actively in late summer or early fall. July and August should deliver the year’s broadest selection before sellers retreat for the holidays.
  • Negotiate, but be realistic. Expect final prices 1–3 % over ask on competitive homes.
  • Run the long-math on rates. Waiting for a rate drop comes with the risk of higher prices.

Advice for Sellers

  • Price to the current data, not to 2021 headlines. Over-asking strategies will backfire; align with the last 60-day comps and you’ll still capture near-peak values.
  • Consider concessions strategically. A closing-cost credit or rate buydown can widen the buyer pool without triggering a headline price cut.
  • List before Halloween. Buyer activity falls sharply after mid-October.

In short, the market is recalibrating. Buyers gain breathing room and the chance to negotiate; sellers still command strong prices with the right prep and realistic expectations. As always, stay alert to rate moves and fresh inventory trends, and we’ll be back with updated insights next month after June’s figures have been reported.

 

Until then, happy home buying and selling from the team at Ridge & Valley Real Estate!

 

Disclaimers

  • Not Financial or Legal Advice: The information in this post is based on data trends and forecasting models. It should not be considered personalized financial or legal advice. Always consult a qualified professional before making real estate or investment decisions.
  • Uncertain Future Events: Real estate markets are sensitive to factors such as interest rates, economic policies, and broader economic shifts. Any unexpected change in these elements could alter the forecasts provided here.
  • Local Variations: Even within the counties discussed, there can be significant variations from one neighborhood or price segment to another. Local conditions can fluctuate rapidly, so these summaries may not apply uniformly to every part of each county.

Sources