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Housing Market Update
July 2016
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2016 Residential Rental Cost Survey
New Hampshire rents increase nearly 15 percent over last five years.
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New Hampshire's housing market continues to pose challenges for renters, a recent survey finds. New Hampshire Housing's annual residential rental cost survey, which canvasses market-rate units across the state in order to gauge the condition of the rental market, found that vacancy rates dropped while rents increased - a continuation of a long-term trend. The state vacancy rate fell to 1.5 percent, while the median rent for a two-bedroom apartment, including utilities, is at $1,206.
Seven of New Hampshire's ten counties have lower vacancy rates than last year. Vacancies are significantly lower in the state's most populous southern tier, where the bulk of New Hampshire's rental housing is located. Hillsborough, Merrimack, and Rockingham counties all have vacancy rates below two percent and are lower than their 2015 rates.
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Housing Market Update Overview
Affordable housing is key to meet labor demands.
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Growth in New Hampshire's housing market is directly related to broader economic conditions. New Hampshire's unemployment rate is one of the lowest in the region, but given that economic growth will depend on the availability of more labor, a lack of affordable housing (both rental and ownership) can retard improvements in the broader economy.
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Employment and labor force
New Hampshire's labor force is nearly as large as it has ever been.
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New Hampshire's labor force is at about 749,000, and total employment at 729,000 is now above the past peak reached in 2008. New Hampshire's labor force participation rate, which reached a peak in early 2000, has declined steadily ever since. The decade-plus decline in the labor force participation rate can be attributed to both the depth of the recent recession and the beginning of the baby boom generation's exit from the workforce. A rebound, while early to predict, will signal a growing participation by the millennial generation.
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Optimism around unemployment
New Hampshire's unemployment rate is second lowest in the country.
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New Hampshire's seasonally adjusted May unemployment rate of 2.7 percent is the lowest rate in New England and is the second lowest state rate in the nation. Based on this measure, NH has returned to its pre-recession level of unemployment.
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Improvement in foreclosure numbers
Cumulative total of 2015 foreclosure deeds is the lowest since 2006.
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The cumulative total of foreclosure deeds for 2015 is 17 percent below the total for 2014, and the lowest annual total since 2006. As of the First Quarter 2016, there were 390 foreclosures in New Hampshire. This is a 27 percent decline when compared to the same time last year and 65 percent below First Quarter 2010, the peak of the foreclosure crisis. Foreclosures are anticipated to decline in 2016.
There is a correlation between unemployment and mortgage delinquency, since most households with mortgages that experience a job loss will fall behind in their payments once savings have been exhausted. Steady improvement in New Hampshire's unemployment rate since the end of the recession has contributed to improvements in the mortgage delinquency rate, yet delinquencies remain above their prerecession level.
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More construction in the Granite State
Permit activity is showing signs of steady improvement.
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Permit activity is now showing signs of steady improvement. However, construction activity remains at only half of the level of a decade ago.New Hampshire and New England continue to lag behind the U.S. on average.
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Continued increase in home sale prices
Home sale prices increased more than 22 percent since May 2012.
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Based on MLS1 sales in New Hampshire, the May 2016 median price of $238,000 is unchanged from the median price in the prior month, but an increase of over 1 percent from May 2015. The long term trend continues to be upward, with an increase of more than 22 percent since May of 2012.
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| New Hampshire Housing Finance Authority 32 Constitution Drive, Bedford, NH, 03110 (603)640-7239 www.nhhfa.org |
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