Soaring Prices, Sinking Affordability: New Hampshire’s Housing Market in 2023
The housing market in New Hampshire is sending mixed signals to homebuyers and sellers alike, with prices of single-family homes hitting record highs and housing affordability sinking to unprecedented lows. According to data for August, unveiled by the New Hampshire Association of Realtors (NHAR), the median sales price of a single-family home stood at a jaw-dropping $490,000. The term ‘median’ here implies that half of the homes sold went for more than this amount, while the other half went for less.
Notably, this median price shows a significant year-over-year uptick, rising 8.9% from $450,000 in August 2022. Although the figure represents a climb from July’s $480,000, it falls slightly short of June’s all-time high of $499,450. These escalating numbers are more than just a seasonal trend. NHAR attributes the inflated sales prices, among other things, to elevated mortgage rates and a low housing supply. The average 30-year fixed-rate mortgage has consistently hovered above 6.5% since May, recently reaching its highest level in two decades.
However, what should really set off alarm bells is the plummeting affordability index, which has bottomed out at an all-time low of 59%. This dismal figure suggests that the median income in New Hampshire covers just 59% of the costs needed to own a median-priced home—encompassing mortgage payments and insurance. An affordability index of 100 or more is considered ideal; in stark contrast, just last month the index was at 62, and a year ago it stood at 74.
And there’s more: buyers in August paid on average 101.9% of the listing price. This is a marginal increase from last year’s 101.7% but a slight dip compared to July’s 102.5%. Meanwhile, the inventory situation saw a minuscule improvement, ticking up to 1.8 months from 1.7 a year ago and 1.6 in July. This metric essentially means that if no new homes were added to the market, it would take 1.8 months to sell off the current inventory. For a balanced market, a 6-8 month inventory is usually ideal.
Financially, the housing market appears to be losing steam, with the dollar volume of closed sales taking a significant hit. In August, the volume was recorded at $743.7 million, a marked decrease from the $880.7 million seen in August 2022.
In terms of sheer numbers, 1,283 single-family home sales closed in August, a slump of 23.2% from 1,671 a year ago, though a slight uptick from July’s 1,142. Additionally, there were fewer new listings, registering an 8.8% drop from last year with 1,499 compared to 1,643.
While the spotlight is on single-family homes, it’s worth mentioning the condo market, which is considerably smaller but not immune to similar trends. The median sales price for condos escalated to $385,000, an 8.5% increase from last year’s $355,000, and barely above July’s $384,950. The affordability index for condos stood at 75, a decline from last year’s 94 and July’s 78.
This New Hampshire housing market snapshot is largely reflective of national trends. Across the United States, the median sales price for homes is at $406,700, a modest 1.9% increase year-over-year, as reported by the National Association of Realtors. Furthermore, home inventory is shrinking nationally, with 14.6% fewer homes available compared to the same period last year.
