Two Cape May County Towns Among Best in New Jersey for First Time Homebuyers

By PATRICIA A. MILLER (Patch Staff)

First-time homebuyers should be happy in Cape May County.

Lower Township and Upper Township each ranked among the top five towns in New Jersey for first-time homebuyers in a recent ranking released by Nerdwallet.

Lower Township ranked No. 2 and Upper Township ranked No. 4.

“This report is part of a new state-by-state series designed to identify the communities in each state where homebuyers are likely to experience healthy value appreciation, in addition to affordability and a great quality of life,” according to the publication’s website.

Nerdwallet used U.S. Census Bureau data to examine 204 municipalities in New Jersey for three key factors - value appreciation, housing cost and prosperity and safety.

The study found that it would take about 15.4 years to save for a down payment on a home in Lower, and 19.8 years in Upper. The statewide median is 19.9 years.

That’s assuming a savings rate of 4.8 percent - based on the U.S. 10-year average as measured by the Federal Reserve Bank of St. Louis, and starting with nothing saved.

“But the actual number of years of savings will vary depending on each individual’s financial situation,” the study states. “By following the Consumer Financial Protection Bureau’s recommendation that homeowners shouldn’t allocate more than 28% of their monthly income to housing costs, we determined that a first-time homebuyer in New Jersey could afford to spend $1,824 a month.”

Nerdwallet looked at all towns in the state with with populations of 10,000 or more. All of the housing and demographic date came from the U.S. Census Bureau’s American Community Survey

Value appreciation made up 40 percent of the score. To determine value appreciation, the study looked at the average growth rate for population and home value from 2010 to 2013.

Housing cost was 40 percent of the score. Since typical first-time homebuyers are in their 30s, the study looked at t the 25-44 age group’s median annual income, which in New Jersey is $78,151.

Prosperity made up 20 percent of the score. The study looked at the percentage of families living in poverty in each municipality.

NerdWallet is a consumer advocacy site dedicated to help readers make a decision based on quantitative factors like growth, safety and affordability.