NH residential real estate forecast at mid-year: hot and hazy

Capital gains tax looms on horizon for some sellers

July 17, 2025

Paul Briand,

At the mid-way point of 2025, New Hampshire’s residential housing market mirrors summer weather — hot and hazy.

The market is hot because sales continue to boom, driving prices up and challenging affordability. And the market is hazy, in that real estate experts hope for relief from but can’t say when that might happen.

Through the first six-months of 2025, median-sales price continues to increase across New Hampshire, up 5.9% as compared to the same period in 2024, according to data from the New Hampshire Association of Realtors (NHAR). Grafton and Cheshire Counties saw the largest increases while Sullivan County is the only county that saw the median price decrease.

Here’s the snapshot of the six-month median price and the percentage increase/decrease over the same period from last year:

Belknap $519,000 +6.7%
Carroll $490,000 +6.5%
Cheshire $385,000 +9.2%
Coos $255,000 +2.0%
Grafton $453,000 +9.3%
Hillsborough $550,000 +1.9%
Merrimack $500,000 +5.3%
Rockingham $675,000 +3.9%
Strafford $515,000 +6.7%
Sullivan $363,000 -0.5%

June was the month that the statewide median price for a single-family home reached a record-breaking $565,000.

That’s a 4.6% increase from the previous high of $540,000 – a price record set in June 2024 and equaled in May. The NHAR said it also marks the 65th consecutive month that the state has seen a monthly price increase compared to the same month of the prior year.

“The idea of owning a home is becoming more challenging for too many New Hampshire residents, especially young families and first-time home buyers,” said NHAR President Susan Cole. “Demand for housing in our state is still very high, and these numbers suggest that trend is not going away soon.”

A measure of that demand is how long homes for sale stay on the market. For a single-family in June it was 19 days, for a residential condominium/townhouse it was 23 days.

Another measure is months supply of inventory — the amount of time it would take to sell the current housing stock. A balanced market is generally thought to be five to seven months’ supply, said Cole, owner/broker of Susan Cole Realty in Lebanon. In June, it was 2.3 for a house, 2.2 for a condo unit.

Nationally, the latest National Association of Realtor data shows 4.6 months’ supply.

There were indeed more homes on the market in June — 2,419, a 25.5% increase over 2024. But Cole said context is important.

“Yes, there are more houses on the market than there were a few years ago, but it’s very important to keep that in context,” Cole said. “You don’t get the full picture unless you look back 10 or 15 years and compare this to a healthy market.”

Just how hot is the market here right now? A new report from ConsumerAffairs names Manchester as the third-hottest housing market in the country behind Hartford, Conn., and Rochester, N.Y. (For the record, the fourth hottest market is Lancaster, Penn., and the fifth is Madison, Wisc.)

Share of homes selling above asking price and how long homes stayed on the market were among the hotness criteria used by ConsumerAffairs.

“In Manchester, New Hampshire, a strong share of homes are selling above list price — 58.8%, or nearly 6 in 10, the fourth-highest percentage in the country. Manchester also has the fourth-smallest share of homes sold below list price (29.8%). Additionally, the median time for homes to spend on the market is just seven days. That’s the eighth-fastest turnaround of all the cities we studied,” said the ConsumerAffairs report.

Desirability affects affordability, and the state’s housing affordability continues to be a challenge at mid-year.

Bob Quinn, NHAR’s chief executive officer, noted that in order to afford the current median priced house of $565,000, a household income of more than $180,000 would be required. Meanwhile, the median household income in the state is about $98,000.

Which is why the affordability index for June stands at 53 — meaning the average earning household only has about half the money needed to afford a home in this market. That, too, is a record for June.

For the first six months of 2025, the affordability index stands at 56, while the condo index is 71.

The NHAR gives props to the 2025 legislative session and to Gov. Kelly Ayotte for initiatives designed to help improve the housing situation in the state.

Among them: streamlining the process to 60-days for residential development that require state permitting, allowing the construction of detached accessory dwelling units (currently, only attached ADUs are permitted), mandating that towns can only require one parking space per housing unit on new development (some communities require more), and allowing residential development in commercially zoned areas.

“We applaud the legislature and governor for taking critical bipartisan action to expand housing opportunities,” Cole said. “By giving property owners greater ability to utilize their own land, and speeding up the permitting process, there will be more opportunity to provide housing for families, workers and businesses.

“But it’s important to remember that this is just a start if we want to bring down the cost of purchasing a home or renting an apartment,” she added. “There is still so much more our elected officials on the local and state level can do.”

The higher price points in the state indicate the value of homes in the state have also gone up, which can have a down side, according to a new report.

Realtor.com reports that 50% of homeowners in the state have more home equity than the IRS currently allows to be excluded from capital gains tax. And 9.3% of married couples filing jointly owners exceed even the $500,000 threshold.

“Now, middle-class homeowners in states like New Hampshire are hitting limits originally designed for luxury markets,” said the new report.

When you sell your home, the profit (the difference between the sale price and your original purchase price plus improvements) is subject to capital gains tax. The IRS allows you to exclude a certain amount of profit from this tax ($250,000 for single filers and $500,000 for married couples filing jointly).

According to Realtor.com, it’s the homeowners who are sitting on a lot of equity that face the harshest consequence of this tax if they sell.

“The so-called home equity tax hits hardest for those who bought years ago and stayed put. In many cases, they’ve paid off their mortgages, made home improvements, and watched values rise. But that appreciation, if it exceeds the exclusion cap, becomes taxable the moment they sell,” said the report.

And that has consequences on the supply side.

“That’s leading to what economists call the “stay-put penalty.” Sellers delay listing their homes — not because they want to stay, but because they don’t want to trigger a big tax bill. And that keeps inventory off the market,” said Realtor.com.

“In New Hampshire’s hot spots — like the Seacoast, Concord, and the Lakes Region — price growth has been strong. Even modest homes that were once well below the threshold are now triggering federal tax exposure,” the report said. “And capital gains tax on real estate isn’t a one-time surprise — it can seriously disrupt long-term planning.”

For the month of June, here are the median single-family home prices for each county: