The New Hampshire housing market in 2024 is marked by increasing home prices and a tight inventory. Here are some key points about the current forecasts and trends:
Rising Home Prices
The median home price in New Hampshire has reached approximately $530,400, with an annual increase of around 10.3% to 16%, depending on the source. This surge is largely due to the limited supply of homes available for sale, which is driving up prices as demand remains strong.
Inventory Shortages
There is a significant scarcity of available housing, with only about 1.3 months of inventory available, well below the balanced market level of five to seven months. This shortage continues to push prices upward and makes it challenging for buyers to find homes.
Affordability Issues
Affordability is a growing concern in New Hampshire. The affordability index has dropped, indicating that median household incomes are insufficient to cover the costs of median-priced homes. It now takes approximately 5.8 years of the median household income to afford a median-priced home in the state.
Mortgage Rates
Mortgage rates have been volatile but are expected to stabilize in the second half of 2024, remaining above 6%. This stability may encourage more buyers to enter the market, although high rates could still pose challenges for affordability. There are some sources that predict further cuts, although they also predict a sharp decline in inflation, which we have yet to see.
Legislative Efforts
To address the housing shortage, legislative measures such as House Bill 1291, which would have allowed for the creation of one detached accessory dwelling unit (ADU) by right statewide, were brought to the floor. Although this bill failed in the past session, there is a lot of pressure to continue to push for this or similar legislation, which proponents say will impact affordability.
I know firsthand that housing affordability is a topic of great importance on both sides of the aisle in Concord and feel confident there will be a concerted effort to bring bills to the floor that will address this growing issue.
Market Activity
Despite high prices, market activity remains robust. Pending sales have increased, indicating ongoing demand. However, the number of homes sold has decreased, reflecting the challenges buyers face in a competitive market. There simply isn’t enough supply.
It’s no secret we have a substantial housing shortage in New Hampshire, and unless we find ways to increase development, housing affordability will continue to be a problem for the state. On another note, rental units also continue to be a challenge as both affordability and availability are causing challenges for lower-income workers and those just starting out. This is also a topic of great importance and is being looked at in the legislature. It’s important to note that Manchester has added 100’s of new low-income units in the past year but the need continues to grow as homes are just too unaffordable, especially for low-income and first-time home buyers.
In conclusion, there’s a consensus among lawmakers that we need approximately 90,000 homes built by 2030 to catch up to the demand for housing in New Hampshire. To reach that goal, we need to work collaboratively to find new and creative solutions. The state and towns need to work together to increase land development opportunities while maintaining the character of communities that make the Granite State such a special place. It was said to me recently that “our housing troubles are a result of our success as a state”. And how true that is. We continue to be a place people desire to be.
As a Realtor®, I see the current housing demand as both a challenge and an opportunity to be part of the solution. As a Granite Stater for the past 25 years, I deeply value the charm and uniqueness of our small, rural community here in Gilford and share the concerns about potential overdevelopment. As a father of five, I worry about the future affordability for my children if we fail to address the housing crisis effectively. While I don’t believe that a ‘one size fits all’ approach is appropriate, we must work together to solve this crisis. As for an answer, I don’t know. All I do know is, we can’t do nothing.
This article was written by Randy Miller. Randy is a Realtor® at Roche Realty Group in Meredith, NH, and can be reached at (603) 279-7046. Please feel free to visit www.rocherealty.com to learn more about the Lakes Region and its real estate market.
