In this Market Update, we review the latest housing data from March 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 April and May 2025, examining trends in inventory, prices, and buyer competition in each county. Finally, we look ahead to the broader 3–6 month horizon (through late summer 2025), 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 Most Recent Market Data & Past Trends

High Mortgage Rates & Buyer Sentiment

Mortgage rates remain in the mid-to-high 6% range for a 30‑year fixed loan (Freddie Mac). Affordability is tight and the Fed’s anti‑inflation stance means little near‑term rate relief. Yet buyers have adjusted: few expect a return to the 3%–4% era, and Fannie Mae’s Home Purchase Sentiment Index shows more consumers now anticipate rising prices while fewer count on cheaper mortgages. Rather than “waiting it out,” many shoppers—especially in the mid‑price tier—are ready to act when the right home appears, keeping demand surprisingly resilient.

Persistent Inventory Shortages

Inventory remains historically tight across North Jersey and the Hudson Valley. Even as the spring market brings more listings, the number of homes for sale in March was well below what we’d expect in a balanced market (generally a 5–6 month supply). Many would-be sellers are locked-in by their existing low mortgage rates – reluctant to give up a 3% loan and purchase a new home at today’s higher rates. New construction and renovation activity also haven’t kept pace with demand, further contributing to the shortage.

In March:

  • Most counties had fewer active listings than a year ago. For example, Bergen County’s inventory was down about 22% year-over-year, and Passaic’s plummeted by roughly 27%. Some areas in New York saw slight inventory growth (Orange and Rockland inventories were a few percent higher YOY), but overall supply remains extremely limited relative to demand.
  • Buyers faced intense competition for the listings that did hit the market. It was common for well-priced, move-in-ready homes to receive multiple offers, often within days of listing. Many sellers continued to receive offers at or above their asking price.
  • Homes in desirable condition sold quickly. Across the region, the average days on market (DOM) for March ranged roughly from just over one month in the hottest areas (e.g. ~36 days in Morris County) to about two months in slightly slower markets like Orange County. In several communities, a typical listing still went under contract in well under six weeks, a remarkably brisk pace by historical standards.

These conditions strongly favor sellers and have kept upward pressure on prices. Even so, affordability challenges are real. Buyers must budget for higher monthly payments, and some have consequently lowered their price range or put home searches on pause. The limited number of listings, however, means those who remain active in the market often have to compete aggressively, despite the cost.

A Look at Sales Activity

Sales activity in March was mixed but generally resilient across our six counties, with performance largely driven by inventory levels rather than buyer interest. Here's a brief county-by-county overview:

  • Bergen County: About 300 closed sales, a slight drop (~5% YOY) reflecting tight inventory and some buyer fatigue at higher price points.
  • Morris County: Roughly 230 transactions, a small increase (~2% YOY), indicating solid demand despite high mortgage rates.
  • Passaic County: Approximately 140 sales, up significantly (~11% YOY), driven by strong pent-up demand and competitive bidding amid limited listings.
  • Sussex County: Around 100 closings, down notably (~17% YOY), due to fewer affordable listings and seasonal timing rather than weaker demand.
  • Orange County (NY): About 165 sales, a robust increase (~13% YOY), benefiting from slightly better inventory and active buyer participation.
  • Rockland County (NY): Approximately 100 closings, up (~9% YOY), reflecting steady interest from NYC buyers amid manageable inventory constraints.

Overall, early 2025 sales volumes are stronger than anticipated given mortgage rates around 6.5–7%. Lower sales in certain counties typically reflect limited inventory rather than diminished buyer interest. Buyers remain active and ready when attractive listings become available.

Pricing Trends: Still Climbing

March home prices across all six counties continued rising due to persistently low inventory and steady buyer demand. Bergen County led with substantial growth, reaching a median price of roughly $812,500, marking a significant 15% increase from last year. Rockland County followed closely, with its median price climbing approximately 13% year-over-year to about $802,000. Orange County also experienced robust appreciation, with a median of around $476,000, up about 10% from March 2024, driven by increased competition and more high-end sales.

Other counties saw more moderate yet steady increases. Morris County's median price rose to about $725,000, approximately 5% higher than last March. Passaic County reached a median price of around $561,000, reflecting a 4% annual gain. Similarly, Sussex County saw prices moderately increase by about 4% year-over-year to a median of roughly $415,000, indicating a potential leveling-off following significant growth the previous year. Notably, no county recorded a price decline.

County-Level Market Forecast: April & May 2025

Below we provide county-by-county forecasts for the next two months (April and May 2025). These projections draw on the recent March data, typical spring seasonal patterns, and the ongoing effects of high mortgage rates on buyer and seller behavior. We focus on key factors like inventory, pricing, and competition levels. Keep in mind that these are expectations based on trends – actual outcomes may vary, especially if economic conditions change.

Bergen County, NJ:

  • Inventory: Inventory is expected to modestly increase through spring but remain historically low. Active single-family listings, just under 800 in March, might rise into the mid-800s by late April and approach 900 by May—still significantly below balanced market levels. Limited new listings reflect homeowners' reluctance to sell.
  • Prices: Prices will likely continue rising. Following March’s median near $812K, April’s median sale price is expected in the low $800,000s, potentially reaching mid-$800Ks by May. High single-digit or low double-digit annual growth is anticipated due to intense competition, especially in desirable locations.
  • Competition & Market Speed: Buyers face continued strong competition through May. The average sale-to-list price ratio should remain around 102%–103%, indicating frequent sales above asking price. Days on market will stay low—likely around 30 in April and possibly under 30 in May for attractive listings. Overall, the market strongly favors sellers, requiring quick and decisive action from buyers.

Morris County, NJ:

  • Inventory: in Morris County is also on the rise but will not break the supply logjam. After roughly 480 active listings in March, we might see around 500–550 homes on the market by May. This is still below last year’s levels (for context, May 2024 had over 600 actives) and reflects the ongoing shortage. Spring will bring more listings, but many sellers remain hesitant, so inventory will likely remain constrained.
  • Prices: in Morris are forecasted to hold steady at high levels. The median price was about $725K in March; for April and May we expect medians in the $730K–$750K range. That represents continued year-over-year growth (potentially in the mid single digits percentage wise). Morris County is one of the priciest markets in the region, and while price gains might moderate slightly due to affordability limits, we don’t anticipate any decline.
  • Competition & Market Speed: The seller’s market conditions should persist. In March, Morris sellers were getting over 105% of asking on average – an indication of bidding wars. Moving into April and May, multiple-offer scenarios will remain common, though if inventory improves slightly, the average sale-to-list ratio might ease to around 102%–104% (still firmly favoring sellers). Days on market could improve from around 36 days in March to closer to 30 days or less by May, as eager spring buyers snap up new listings quickly. Buyers in Morris should plan to offer aggressively on attractive listings, while sellers can expect swift sales if pricing is on point.

Passaic County, NJ:

  • Inventory: Inventory will remain very tight through spring. From just ~312 active listings in March, expect a modest increase to around 350–370 by May. Despite a rise in new listings, strong buyer demand quickly absorbs available homes.
  • Prices: Prices should continue rising, building on March's median of ~$561K. Intense competition is expected to push median sale prices into the upper $500Ks by late spring, possibly nearing $600K by May—representing double-digit annual growth.
  • Competition & Market Speed: The market will stay fiercely competitive. Expect sale-to-list ratios of around 102%–105%, indicating most homes selling at or above asking price. Days on market may decrease slightly to the high 30s by May. Buyers should remain persistent and decisive, while sellers will continue benefiting from strong demand and favorable pricing conditions.

Sussex County, NJ:

  • Inventory: Inventory should slowly increase through spring, rising from roughly 325 active listings in March to about 350–380 by May. Despite this modest rise—fueled by more new listings and slightly slower sales—available homes will remain limited compared to pre-2020 levels.
  • Prices: Prices are expected to grow steadily but modestly. March’s median of ~$415K should move into the low $420Ks in April and around $430K by May, reflecting mid single-digit year-over-year growth. Sussex’s affordability compared to nearby counties continues to support steady demand and stable price appreciation.
  • Competition & Market Speed: Competition remains strong despite fewer recent closings. Expect sale-to-list ratios around 102%–103% through May, with most homes selling near or above asking price. Days on market, which were around 50 earlier this year, could improve to about 40–45 days by May. Buyers still need to act decisively, although the market pace is slightly less intense than counties closer to NYC.

Orange County, NY:

  • Inventory: Inventory is trending upward, providing buyers slightly more options than nearby NJ counties. Active listings (~647 in March) could rise to 650–700 by May, boosted by a strong seasonal increase in new listings. Despite this improvement, supply remains relatively low overall, though it's more generous compared to surrounding markets.
  • Prices: Prices are expected to remain high with steady, gradual increases. March's median of ~$476K (up about 10% YOY) should reach the upper $480Ks by April and possibly $490K–$500K by May, maintaining high single-digit annual appreciation. Higher interest rates have moderated some pricing pressure compared to NJ, but the market still trends upward.
  • Competition & Market Speed: Orange County has a slightly more balanced market than NJ but remains seller-leaning. March sales averaged 96% of original list prices, indicating some negotiating room. Increased spring buyer activity could lift that ratio closer to 98%–100% by May, especially for attractive properties. Days on market, previously averaging 70+ days, may improve to about 55–65 days by late spring, giving buyers a bit more time than in hotter markets—but desirable homes will still sell relatively quickly.

Rockland County, NY:

  • Inventory: Inventory will rise modestly from about 350 active listings in March to roughly 370–400 by May. Despite this slight improvement, overall supply remains limited, ensuring the market stays firmly in sellers’ favor.
  • Prices: Prices should remain high and continue rising gradually. March’s median (~$802K) will likely remain in the high $700Ks to low $800Ks through April and May, reflecting mid-to-upper single-digit annual growth. Prices will stay near record highs, though increases may slow slightly as buyers show price sensitivity.
  • Competition & Market Speed: The market will remain competitive. March homes sold for about 98% of asking, and this ratio might approach ~100% by May. Average days on market—over 60 days recently—should shorten slightly to about 45–50 days by late spring. Though Rockland remains seller-friendly, buyers may experience a slightly less rushed environment compared to North Jersey, especially at the higher end of the market.

3–6 Month Regional Market Outlook (April–September 2025)

Looking beyond the immediate horizon, the next 3–6 months are likely to see the current trends play out in a moderate way. Here are four key aspects of our medium-term outlook for the regional housing market:

  1. Mortgage Rates & Affordability: Mortgage rates are expected to stay elevated through summer 2025, hovering in the 6.5%–7% range. This "higher for longer" environment will continue to pressure affordability, limiting buyers’ purchasing power and constraining rapid price increases. However, many buyers have adjusted to these higher rates, recognizing that sub-5% mortgages aren't returning soon. This acceptance is likely to bring sidelined buyers back into the market, sustaining demand despite affordability challenges. Overall, while elevated rates remain a significant hurdle, they're unlikely to stall market activity completely barring any major economic shocks.
  2. Inventory Projections: Inventory should modestly increase as we move through spring into early summer, driven by seasonal trends and homeowners deciding to sell amid high prices or life changes. However, many potential sellers, particularly those locked into low mortgage rates, will likely stay put, limiting inventory growth. While total listings may peak around June or July, they’ll remain significantly below balanced market levels (currently at 1.5–2.5 months vs. a balanced 5–6 months). Buyers can anticipate slightly better selection than winter, but limited options overall. Sellers will maintain their advantage, although the market won't be quite as tight as earlier this year.
  3. Sales Volume: We anticipate closed sales to moderately surpass 2024 levels through the rest of 2025, driven by slightly improved inventory and buyers adapting to higher mortgage rates. While not returning to the intense pace of 2021, activity should rebound gradually as households that previously delayed moves enter the market. National forecasts also predict a mild increase in sales volume this year. Provided inventory increases seasonally as expected, monthly closed sales from spring through summer should exceed those from the same period last year. However, limited inventory remains a key factor that could restrict total sales.
  4. Home Prices & Market Balance: Home prices are expected to keep rising over the next 3–6 months, though growth may slow by late summer as inventory gradually increases and high mortgage rates persist. While early 2025 saw double-digit gains, price appreciation may ease into the single digits in the second half of the year. Declines remain unlikely without a major economic shock. Sellers will continue to hold the advantage, especially in the affordable and mid-range segments, though high-end listings may see longer market times or slight price adjustments. By late summer, the market may feel a bit less intense, with fewer bidding wars and a touch more negotiating room—but it will still lean strongly in sellers’ favor.

Final Thoughts

March 2025 confirmed that our regional housing market is still running hot. Demand has out‑performed expectations while inventory remains historically thin, so pricing power stays with sellers. A normal spring bump in new listings and buyers should arrive in April–May, yet the influx is unlikely to close the gap: more homes will hit the market, but even more buyers are waiting. We therefore expect prices to remain near record highs, though year‑over‑year gains should ease into the single digits as affordability starts to bite. Any shift toward balance looks gradual, not abrupt.

Broader economic factors remain a wildcard. While unemployment across NY–NJ is low and household incomes are edging up, consumer sentiment data shows signs of concern highlighting worries about rates and budgets. Unless job losses or a fresh rate spike appear, this “steady‑but‑tight” climate will persist.

For Buyers
• Secure full pre‑approval and watch for brief rate dips in the mid‑6 % range (per Freddie Mac weekly data).
• Clarify must‑haves versus nice‑to‑haves, then move fast and bid firmly when the right home surfaces.
• Partner with an agent who can flag new listings the moment they post—persistence wins deals in a low‑inventory market.

For Sellers
• Late spring is a prime window: buyer traffic is strong and listing competition remains light.
• Price realistically and present impeccably—clean, decluttered, minor repairs done—to spark multiple offers and quick closings.
• Momentum may cool modestly by late summer as inventory peaks, so acting sooner could capture peak demand.

In short, higher rates have created headwinds but not derailed the fundamental mismatch of demand outstripping supply. Barring an economic shock, expect continued competition and firm pricing through summer 2025. We’ll return with fresh analysis once April’s numbers are in.

 

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